Brent crude futures fell below $60 on Friday, posing a threat to Nigeria’s 2020 budget, which put oil benchmark at $60 per barrel, as the spread of the coronavirus in China continues to affect demand due to restrictions placed on travel.

The bearish performance for the Brent crude continued as it further dropped 2.14 percent equivalent to $1.31 to trade at $59.97 per barrel on Friday night at the global market.

Also, the US West Texas Intermediate (WTI) crude further moved down by 2.32 percent or $1.29 to trade at $54.30 per barrel. This performance was the lowest settlement for the American futures since November last year.

During the preparation of the country’s budget, oil prices were pegged at $60 per barrel because global economy issues like the US-China trade deal and the US-Iran conflict had helped prices moved up.
ALSO READ Nigeria On Right Path To Diversified Economy—Amosun

However, with this unforeseen circumstances, the country’s hope of raising revenue to fund the this year’s budget is already under threat because the sale of the commodity is the main source of foreign exchange earnings for Nigeria.

This week started on the bullish note for oil prices, after military forces in Libya blocked oilfields which threatened to cut off the entire 1.2 million barrels per day oil production of the African OPEC member.

But on Tuesday, despite the continued blockade in Libya, oil prices started to slip as market faced a new challenge over the deadly coronavirus in China, which, analysts say could cut oil demand as travel restrictions in and around the area of the outbreak are already in place.
ALSO READ FG Begins Savings Bonds Sales for May 2018

The SARS CoV, better known as the SARS Coronavirus, is highly contagious and has put two Chinese cities on lockdown since Thursday as health authorities around the world scramble to prevent a global pandemic.

The coronavirus outbreak has so far killed 17 people and infected more than 800 people and to prevent this, a widespread travel restriction has followed, reducing regional travel meaning that the oil market could see a drop of 260,000 barrels per day in the global oil demand market—170,000 bpd of which would be in the form of jet fuel.

The virus has spread to South Korea, Japan, Thailand, Vietnam and the United States, among other places. On Friday, the CDC confirmed the second case in the United States and this may further threaten oil prices even with certain trends which normally helped prices took the backseat such as reports by the US Energy Information Administration (EIA) that inventory fell by 400,000 barrels for the week ending January 17.
ALSO READ Agusto & Co Affirms 'Bbb' Rating to C&I Leasing N600m Bond

Even despite the disruption caused by the virus, the oil market is also faced by concerns of oversupply, as the International Energy Agency (IEA) said it there is expectations of a surplus of 1 million barrels per day in the first half of the year.

allthingsgood:
Some people are sick and insane

When the price of oil went up u guys shouted that Nigeria will suffer cos our reserves will fall on fuel importation, so now that the price of oil has fallen, how cone it's still a bad news Oloshi

InfernoNig:
In other words. (Asia) China is our biggest customer. Chai E don finish oooo.

Esseite:


Either ways, the tax payers are at the bottom end..

1 - High crude = high petrol subsidy = More tax
2 - Low crude = low petrol subsidy = low Govt revenue = more tax.

allthingsgood:
Some people are sick and insane

When the price of oil went up u guys shouted that Nigeria will suffer cos our reserves will fall on fuel importation, so now that the price of oil has fallen, how cone it's still a bad news Oloshi

Dozie32:
For All my fellow nairalanders, I pray that God continues to bless United State of America.. Amen!

budaatum:
Our biggest threat is probably friendship between US and Iran. If sanctions get lifted and Iran oil gets to market the price would likely drop to sub $30 a barrel then we'd really cry!

wink2015:
Nigeria should go and face Agriculture

Northern Nigeria political leadership that is afraid of operations Amotekun may as well know that the biggest threat to Nigeria 's unity is not the so called "regional army" that the likes of Balarabe Musa, Junaid Mohammed, Minister Shehu Malami is referring to.

The biggest threat is a country that is Nigeria that refuses to explore its capacity to maximise its economic and food security.

The monoproduct economy of Nigeria which previous government starting from the military administration refuses to change is responsible for the TIGHT CORNER Nigeria is finding itself.

The Buhari administration has even shot itself by closing the border.

Closing Nigeria 's border is not sustainable.