The recent rise in crude oil prices may be reversed following largely unsuccessful deliberations by members of the Organization of Petroleum Exporting Countries (OPEC) in Qatar on Sunday.
Nigeria’s minister of state for Petroleum Resources, Dr Ibe Kachikwu, told newsmen that the stakeholders at the meeting could not agree on the decision to freeze production and more particularly on the countries to be affected by the freeze were it to be implemented.
The meeting of 16 petroleum exporting countries stretched for 10 extra hours but ended in a diplomatic failure as discussions stumbled over whether the agreement should extend to other producers such as Iran, which was not present at the meeting.
According to Bloomberg analysts, the failure of OPEC to reach a final accord on Sunday may lead to a “severe” drop in prices.
Brent crude, which sank to a 12-year low in January, has climbed almost 30 percent in the past two months as Saudi Arabia and Russia worked on the plan to cap crude production.
While analysts doubted that any accord would have a significant impact on the global oil surplus, the inability to agree on a limit undermines any prospect of coordinated action to solve the oil crisis.
Nigeria’s struggle to balance its books may take a hit should prices drop below the $38 benchmark with which the 2016 national budget is planned.
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