- The price of the Organization of the Petroleum Exporting Countries (OPEC) basket of thirteen crudes stood at $47.44 a barrel on Thursday, May 4
- This is in contrast with $48.34 the previous day, according to OPEC calculations
- This is bad news for Nigeria at a time the country is battling economic recession
Oil prices collapsed on Thursday, May 4 to their lowest since late November as investor worries about the world's stubbornly persistent glut of crude erased most of the gains that followed last year's OPEC's output cut.
The slide worsened after OPEC delegates downplayed the chance that their group and other producing countries would deepen their output cuts when they meet on Thursday, May 25. They did say current output cuts were likely to be extended.
This is coming few weeks after Nigeria’s oil production for the month on March suffered a dip as the country’s output was to 1.269 million barrel per day (BPD) according to the Monthly Oil Market Report (MOMR) released by OPEC.
According to the publication, Nigeria lost 156,900 bdp for the month of March considering the country produced 1.426mbpd in February in spite of the fact that the country has not witnessed militancy attack in a while.
"The market continues to hunt for a bottom," Gene McGillian, manager of market research at Tradition Energy in Stamford, Connecticut told CNBC.
Late last year, OPEC and other producing countries announced oil output cuts of 1.8 million barrels per day (bpd) for the first six months of this year.
"We still have a near record overhang and signs of increasing production in areas of the world outside the producers that agreed to the cuts," McGillian added.
OPEC oil output fell for a fourth straight month in April, a Reuters survey found on Tuesday, as top exporter Saudi Arabia kept production below its target, which helped offset weaker compliance by other members.
"Saudi Arabia is the only country that has fulfilled its obligation every month since January. On one hand, it shows its commitment from OPEC's kingpin to make the supply cut agreement work. On the other hand, one can only ponder how long they are willing to shoulder the burden of supporting oil prices on their own," PVM Oil Associates analyst Tamas Varga said.
Meanwhile, Bayelsa, Akwa Ibom and Rivers states have filed a suit at the Supreme Court against the federal government challenging the loss of N500 trillion in oil revenue.
The states cited negligent execution of petroleum production contracts by multinationals operating in Nigeria as one of their reasons for approaching the apex court.
The plaintiffs are praying the apex court to compel the federal government to implement Section 162 of the 1999 Constitution as it relates to oil revenue generation and sharing among the component parts of the federation.