Nigerian crude hits all-year high at $36

Nigerian crude oil, bonny light, is currently trading at an all-year high of $35.76 per barrel, the Central Bank of Nigeria (CBN) has confirmed.

Bonny light, which opened the year 2016 trading around $35, plunged into the 20s, following a global slump in oil prices in January 2016.

The initial slump in crude oil prices led to more criticisms for the fiercely-criticised 2016 budget, which put crude oil prices at $38 a barrel, against global suggestions that crude oil prices would sink to $20 in 2016.

Following the January slump, which saw the Organisation of Petroleum Exporting Countries (OPEC) basket price fall as low as $25, the oil cartel met with Russia to freeze crude oil output at January production levels.

The “freeze” talks led to a surge in crude oil prices, until Iran burst the bubble by regarding the freeze as a joke by OPEC.

“This is more like a joke that they tell us they would freeze their production above 10 million barrels per day and that we should also in turn freeze our production at one million,” Bijan Zangeneh, Iranian oil minister, had said.

Iran called on Saudi Arabia to cut its production levels, saying it could not be pumping 10 million barrels and expect Iran to freeze output at just one million barrels per day.

Speaking through its oil minister, Saudi in turn said: “There is no sense in wasting our time seeking production cuts. Not many countries are going to deliver, even if they say they will cut production they are not going to deliver.”

Ibe Kachikwu, Nigeria’s oil minister, has however revealed that the “freeze” talks would continue in Russia on March 20, to achieve some sort of price stability in the oil market.

The gradual rise in Nigeria’s crude oil price has resulted in the rise of the country’s foreign exchange over the past week.

With crude oil prices approaching the budget benchmark, Nigeria’s budgetary deficit should be on the low side.