Oil price falls to $46 per barrel as OPEC and Russia fail on output agreement - threatening Nigeria's 2020 budget

  • Oil price drops to 7% to $46 per barrel on Friday.
  • Amid the coronavirus outbreak, the OPEC wants a cut in oil production to tame low prices and production by protecting allies.
  • At Friday's meeting, OPEC and Russia fail to agree on a production cut.

Oil prices dropped below $50 per barrel again on Friday, shedding 7% as Russia reportedly defiled talks with the Organisation of the Petroleum Exporting Countries (OPEC) for output cuts.

Amid the coronavirus outbreak, the OPEC has asked for a cut in oil production to tame low prices and production by protecting its members.

Brent crude oil, the international oil benchmark, dropped 7% to $46 per barrel while WTI also erased 8% to $42 per barrel.

What is happening?

OPEC proposed making substantial production cuts to head off another price slide.

On Thursday, February 5th, 2020, the oil cartel met in Vienna and announced a proposed 1.5 million barrels per day (mb/d) of additional cuts without Russia's input.

The idea calls for OPEC itself cutting by 1 mb/d, and the non-OPEC coalition reducing output by 0.5 mb/d. In a statement, OPEC said the COVID-19 outbreak has had a major adverse impact on global economic and oil demand forecasts in 2020, particularly for the first and second quarters.

According to reports, Russia on Friday resisted pressure from his OPEC allies to make deeper production cuts, pushing the cartel’s high-stakes diplomatic gamble to the brink of failure and sending oil prices plunging.

Why would this affect you

Nigeria as a country relies solely on oil price and production, pegging production at 2.18m barrel per day and price at $57 per barrel. Any shortfall may spell doom for the nation's economy and change the direction of the economy.

Some of the resultant effects will be on foreign reserves, affecting, exchange rate - Naira to dollar, and businesses.

JOIN OUR PULSE COMMUNITY!

Unblock notifications in browser settings.

Eyewitness? Submit your stories now via social or:

Email: news@pulselive.co.ke

Recommended articles

Fred Obachi Machoka’s heartfelt message to his wife of 41 years [Photos]

Fred Obachi Machoka’s heartfelt message to his wife of 41 years [Photos]

Where is Mr Tembo? Ex-Tahidi High principal resurfaces [Video]

Where is Mr Tembo? Ex-Tahidi High principal resurfaces [Video]

Zari Hassan lectures Tanzanians over her viral black innerwear video

Zari Hassan lectures Tanzanians over her viral black innerwear video

Diana Marua hospitalized, Bahati gives update [Photos]

Diana Marua hospitalized, Bahati gives update [Photos]

Betty Kyallo shares photos of the first Subaru she bought after joining KTN

Betty Kyallo shares photos of the first Subaru she bought after joining KTN

North Korean man who smuggled 'Squid Game' into the country to be sentenced to death

North Korean man who smuggled 'Squid Game' into the country to be sentenced to death

Yvette Obura’s heartwarming message to Diana Marua excites Kenyans

Yvette Obura’s heartwarming message to Diana Marua excites Kenyans

Emotional Harmonize exposes Diamond as their beef heats up [Video]

Emotional Harmonize exposes Diamond as their beef heats up [Video]

Nick Ndeda talks relationship with Betty Kyallo & why he keeps his kids private

Nick Ndeda talks relationship with Betty Kyallo & why he keeps his kids private