COVID-19 IN THE OIL SECTOR: EFFECT AND MITIGATION STRATEGIES

COVID-19 IN THE OIL SECTOR: EFFECT AND MITIGATION STRATEGIES


The global oil market is presently facing an unprecedented financial crisis with oil prices currently hovering around $26.44 per barrel as at the time of this report. Global oil demand has reduced by 30 million bpd which has hit an 18-year low, thus propelling talks about production cuts by the Organisation of Petroleum Exporting Countries (OPEC) member countries and other non-OPEC countries to reduce global supplies. This crisis currently being faced is due to the outbreak of the Corona Virus (COVID-19) pandemic which called for a shutdown of business activities causing economic slowdown across the world and Nigeria in particular. This report seeks to evaluate the causes and effects of the dip in oil prices on the Nigerian economy and proffer possible mitigation strategies.
2.0. CAUSES OF THE FALL IN OIL PRICE 
Generally, oil demand is determined by various factors such as: OPEC’s influence on oil prices, supply and demand impact, production costs, storage and interest rate impact, and also natural disasters. A combination of fall in oil demand…continue reading