By Adewale Sanyaolu

Funding for Nigeria’s 2024 budget may hit the brickwall as Brent crude yesterday dropped below Nigeria’s oil price budget benchmark of $77.96 per barrel to trade at $77.02.

The development may not augur well for the country’s struggling economic which had project oil production at

The executive arm of the government put the 2024 budget assumption for fuel price at $77.96 per barrel. This means Nigeria is opening the year with a revenue deficit of 81 cents on every barrel of oil.

Recall that the Nigerian National Petroleum Company Limited in December said that projections on crude oil production, and price benchmark of $77.96 for the 2024 budget, were realistic and realisable.

NNPCL Group Chief Executive Officer, Mr Mele Kyari, gave the assurance during an interactive session with the Senate Committee on Finance at the National Assembly, Abuja, last December.

Kyari said it was unlikely for market prices to drop to 70 dollars per barrel in the market, adding however, that prices could oscillate.

“With what we see in the market today and potentially in the year 2024 and even beyond the next two years, it is very unlikely to see $70 per barrel oil in the market. The oscillation we are seeing, sometimes you do see prices coming down to $75 to the barrel and sometimes it goes above it, overall, benchmarks are averages. We think that the proposal by Mr. President around the $77.96 is still realisable in 2024.” Oil prices fell by more than 2% on Monday on sharp price cuts by top exporter Saudi Arabia and a rise in OPEC output, offsetting supply concerns generated by escalating geopolitical tension in the Middle East.

Meanwhile, Brent crude slid 2.2 per cent, or $1.74, to $77.02 a barrel by 1024 GMT while U.S. West Texas Intermediate crude futures shed 2.3 per cent, or $1.73, to $72.08.

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Both contracts climbed more than 2% in the first week of 2024 on intensifying geopolitical risk in the Middle East after attacks by Yemeni Houthis on ships in the Red Sea.

On Sunday, rising supply and competition with rival producers prompted Saudi Arabia to cut the February official selling price (OSP) of its flagship Arab Light crude to Asia to the lowest level in 27 months.

“Oil watchers are rightly questioning that the kingdom’s cut is not only aimed at quelling interference from non-OPEC supply but from its very own cartel membership,” said John Evans, of oil broker PVM.

A Reuters survey last Friday found that OPEC oil output rose in December as increases in Iraq, Angola and Nigeria offset continuing cuts by Saudi Arabia and other members of the wider OPEC+ alliance.

 The boost came ahead of further OPEC+ cuts in 2024 and Angola’s exit from OPEC, which are set to lower January output and market share.

“If we were just to focus on the fundamentals, including higher inventories, higher OPEC/non-OPEC production and a lower than expected Saudi OSP, it would be impossible to be anything other than bearish on crude oil,” said IG analyst Tony Sycamore.

On Sunday rising supply and competition with rival producers prompted Saudi Arabia to cut the February official selling price (OSP) of its flagship Arab Light crude to Asia to the lowest level in 27 months.

“Oil watchers are rightly questioning that the kingdom’s cut is not only aimed at quelling interference from non-OPEC supply but from its very own cartel membership,” said John Evans, of oil broker PVM.