The hope of Nigeria's economy pulling out of recession in 2018 increases as oil prices hit 18-month high yesterday, the first trading day of 2017, with believe that agreement between the Organisation of Petroleum Exporting Countries, OPEC, and non-OPEC members to cut production, which came into effect on Sunday, January 1, 2017, will tackle global supply glut.
Benchmark Brent crude jumped more than 2.0 percent to a high of $58.37, up $1.55 a barrel and its highest since July 2015, while United States’ light crude oil hit rose to $55.24, up $1.52 a barrel, also its highest since July 2015.
At current price levels, Nigeria’s 2017 budget predicated on oil price benchmark of $42.5/ barrel is likely to hit a significant bridging of the N2.36 trillion deficit by extra oil revenue estimated at about N1.2 trillion should the price rise be sustained through the fiscal year.
In addition to the price surge, Nigeria is also benefiting from the OPEC deal which excluded the country from the output cut against the backdrop of militancy activities which had forced its output down to as low as 1.5 million barrels per day as at the time of the OPEC output cut talks. With the exclusion clause for Nigeria and two other countries Nigeria is free to increase output while the OPEC deal