The Minister of State for Petroleum Resources, Ibe Kachikwu, has predicted a further fall in crude oil price up to $44 per barrel if the Organisation of Petroleum Exporting Countries fails to reach a consensus this week.
Nigerian Government has proposed a crude oil benchmark price of $42.5 per barrel for the 2017 budget, compared to this year’s $38 per barrel.
Brent, against which Nigeria’s oil is priced, dropped to $47.12 per barrel on Friday from $49 per barrel on Thursday.
OPEC will meet on November 30 in Vienna, Austria, to assign output quotas after agreeing on a framework deal in September to tackle the supply glut in the global oil market.
“The challenge is less with OPEC and more with the outer forces we don’t control. The United States is beginning to ramp up volumes again,” Kachikwu told Bloomberg in an interview in Tokyo.
He said, “My greater worry is less than OPEC’s ability to find unity in these issues, which I think we will; and more the fact of how much a decision that we make impacts on the pricing issues.”
Kachikwu said oil price might rise slightly above $50 per barrel if a consensus was reached, and could fall as low as $44 without a deal.