Falling oil prices may Frighten Nigeria’s earnings, reserves

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Traders work at the Nigerian Stock Exchange in Lagos, February 13, 2015. REUTERS/Joe Penney

|By Okafor Joseph|March 15 2017| 8:30 AM

Due to the rise of Nigeria’s foreign exchange earnings and build-up of external reserves, which began five months ago, may be under threat from exogenous shock arising from the recent fall in oil prices, Naija247newsreports.

Following the combination of rising oil prices and the revival of U.S. shale production has created a new set of challenges for the re-start of the PNZ fields for Kuwait and Saudi Arabia which has dampened production cuts carried out by members of the Organisation of Petroleum Exporting Countries (OPEC) and Russia to shore up prices.

According to sources , oil prices slid 2 per cent on Thursday, extending the previous session’s dive that brought prices to the lowest levels this year, as record U.S. crude inventories fed doubts about whether OPEC-led supply cuts would reduce a global glut.

Although the impact of sliding oil prices are yet to hits   the Nigeria, market experts have cautioned that the external shocks would eventually hit the country’s foreign earnings and reserves.

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