L
LequteMan
Guest
After several years of boom, the crude oil market has been dealt a blow below the waist. The commodity's price has suffered a downward spiral since America's shale oil emerged.
The impact of the continued slide in the price of crude is well known to everyone familiar with Nigeria’s economic situation particularly the exchange rate. One thing that has however not been fully acknowledged is the role OPEC played in all of this.
OPEC believes that Americans and their shale technology are an existential threat to their very own survival and will rather sustain a price war that will engulf than allow them become the sole victim.
At each OPEC meeting they continue waging the war with their only weapon being a refusal to cut oil prices. As a result, every time OPEC has a meeting, the price of crude oil drops further.
For the ordinary Nigerian on the street, this is a battle you have no say about. Your government is equally powerless despite currently occupying the presidency of OPEC.
The continued effect of the war is more job losses, further depreciation of the naira and cuts in budgets from your government, in your offices and your homes.
Nigeria can’t increase oil production without sticking to its OPEC quota or decide how much oil prices should be. The consequences are dire and it’s glaring for all to see already.
Beyond the CBN, the past government, the present government and other managers of the economy OPEC is the most to blame. The best the current government can do is to erect buffers that can provide help curtail the shocks we are likely to continue to experience for the next few months of not years.
Nairametrics
The impact of the continued slide in the price of crude is well known to everyone familiar with Nigeria’s economic situation particularly the exchange rate. One thing that has however not been fully acknowledged is the role OPEC played in all of this.
OPEC believes that Americans and their shale technology are an existential threat to their very own survival and will rather sustain a price war that will engulf than allow them become the sole victim.
At each OPEC meeting they continue waging the war with their only weapon being a refusal to cut oil prices. As a result, every time OPEC has a meeting, the price of crude oil drops further.
For the ordinary Nigerian on the street, this is a battle you have no say about. Your government is equally powerless despite currently occupying the presidency of OPEC.
The continued effect of the war is more job losses, further depreciation of the naira and cuts in budgets from your government, in your offices and your homes.
Nigeria can’t increase oil production without sticking to its OPEC quota or decide how much oil prices should be. The consequences are dire and it’s glaring for all to see already.
Beyond the CBN, the past government, the present government and other managers of the economy OPEC is the most to blame. The best the current government can do is to erect buffers that can provide help curtail the shocks we are likely to continue to experience for the next few months of not years.
Nairametrics
