African oil producers are being compelled to comply with their various OPEC quota. This is to keep prices at current levels of $40pb or above. To countries like Nigeria whose oil revenues are more production than price sensitive, this could be a problem in the near term.
Like all cartels or oligopolies, price leadership is the key to maintaining price and output discipline.
Nigeria’s oil benchmark has just been approved by parliament at $28pb. Its fiscal programs and the value of the naira in the forex market will be determined to a large extent by the fortunes of the oil markets.
In the slides, the FDC Think Tank discussed these and other burning issues on Channels TV Business Morning programme.
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