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Crude oil prices in the Organisation of Petroleum Exporting Countries (OPEC) market fell to an all-year low of $35.30 at the end of Tuesday. It comes a day after Nigeria’s Federal Executive Council based the proposed 2016 budget on a benchmark of $38 per barrel.
A statement on OPEC’s website on Wednesday morning read: “The price of OPEC basket of twelve crudes stood at 35.30 dollars a barrel on Tuesday, compared with $36.45 the previous day, according to OPEC Secretariat calculations”,
This report comes just as senators are on the floor deliberating on the medium term expenditure framework (MTEF) submitted to it by the executive.
With current realities in the crude oil market, and the expected increase in oil oversupply in 2016, oil may sell for less way more than $38 per barrel. Some senators on Wednesday argued that the benchmark be reduced to $35 per barrel to be on the safe side.
although Deputy Senate President had argued that the benchmark be raised to $40 because “from the projection of oil price for 2016, it is estimated that it will hover between $40 and $45”.
The new OPEC Reference Basket of Crudes (ORB) is made up of the following: Saharan Blend (Algeria), Girassol (Angola), Oriente (Ecuador), Iran Heavy (Islamic Republic of Iran), Basra Light (Iraq), Kuwait Export (Kuwait), Es Sider (Libya), Bonny Light (Nigeria), Qatar Marine (Qatar), Arab Light (Saudi Arabia), Murban (UAE) and Merey (Venezuela).