March 9 (Lagos) - Brent oil prices declined 23% to $49.99 a barrel at 730 AM and WTI crude oil futures fell 25% to $34.44 per barrel in New York.
Nigeria's bonny light is staring at further decline after falling more than 10% on Friday to $ 46.33 per barrel.
The Saudi Arabia led OPEC failed to reach agreement with Russia over further production cuts to shore up crude oil price. They wanted a cut of 1.5 million barrels per day.
This also puts into question the need for OPEC as they are clearly not that powerful anymore because the biggest producers of crude oil in the world are not part of it. It shows the power that Russia has over the energy markets. The price decline will also affect the viability of US shale oil producers.
The crude oil price was supported by artificial measures for the past 2-3 years and now Russia has clearly decided to let free markets prevail and price discovery take place.
The Nigerian government will be watching all this politics unravel around the globe and affect the country in a huge way because their agriculture policy has not yet shown the desired results. In other words we may be facing another devaluation this year unless crude oil prices rebound. Some analysts are calling for $20 oil because of the coronavirus issue which is affecting demand from China and India.