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Oil price tumbles to $29 as coronavirus crisis worsens

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Crude oil



The international oil benchmark, Brent crude, fell below the $30 per barrel mark on Monday as the coronavirus crisis worsened over the weekend, leading governments and businesses to shut down as the global economy appeared to be headed towards certain recession.

This is coming as Saudi Arabia reiterated its plans to boost production in response to a developing price war with its Russia after efforts to restrict supply failed earlier this month.

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Analysts have said the coming flood of supply could result in the largest surplus of crude in history.

Brent, against which Nigeria’s crude is priced, dipped by $3.89 to $29.96 per barrel as of 6:30 pm Nigerian time on Monday, its lowest since January 2016.

The Federal Government said last week that it would cut this year’s budget, which is based on an oil price benchmark of $57 per barrel.
The coronavirus outbreak, which has infected at least 174,000 people and killed around 6,700, has already caused oil prices to plummet by 50 per cent since the start of the year.

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Earlier this month, the Organisation of Petroleum Exporting Countries and its allies, led by Russia, failed to extend production cuts that began in January 2017, aimed at supporting prices and lowering stockpiles.

An OPEC and non-OPEC technical meeting planned for Wednesday in Vienna has been called off as attempts to mediate between Saudi Arabia and Russia after the collapse of their supply cut pact made no progress, Reuters quoted sources as saying.

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