September 21, 2020/Coronation Report

As we often write, Nigeria’s public finances – all the way from trade balances through to the Federal Government’s budget – work well when oil trades over US$50.00/bbl.

We have seen some forecasts predict oil prices above US$50.00/bbl as early as Q4 this year, and indeed oil (in this case Brent) traded at around US$47.00/bbl recently.

Yet last week’s meeting of the Organisation of the Petroleum Exporting Countries (OPEC) seemed to be in no hurry to deepen its production cuts to support prices. On page 2 we argue that the cartel, and its partner Russia, may bid their time before letting prices rise above US$50.00/bbl again.

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