The downturn in oil prices came on the heels of worries that Saudi Arabia and Russia could pump more crude to compensate for a potential supply shortfall, with hedge funds reducing bullish positions in crude.
Brent, against which Nigeria’s crude oil is priced, dropped to $74.89 per barrel as of 6:40pm Nigerian time, while the United States’ West Texas Intermediate slumped by $1.50 to $66.38 per barrel.
Following the recent rally in crude oil prices, the National Assembly had increased the oil benchmark price for the 2018 budget to $51 per barrel from $45 proposed by the Executive.
Ahead of the Organisation of the Petroleum Exporting Countries’ meeting in Vienna on June 22, concerns that Saudi Arabia and Russia could boost output have exerted downward pressures on oil prices, along with rising oil production in the United States.