The basket of crude oil used as a benchmark indicator by the Organization of Petroleum Exporting Countries, or OPEC, dropped to $27.85 a barrel, its lowest value since 2003, the OPEC Secretariat said on Friday.
OPEC said the price of its basket, which includes 12 varieties of crude, declined by 6.26 percent on Thursday, compared with the closing price of the previous session. The price of OPEC black gold started to sink massively early last year due to the group’s decision to maintain its production level despite the oversupply in the market.
The new year may be only a week old but already the currencies of some oil exporters are shaping up to be among the worst performing financial assets of 2016. The Nigerian currency, the naira is now at a record low of N278 to a dollar, the Angolan kwanza slumped 15 per cent to an all-time low of 158.7 to the US dollar, extending its 24 per cent slide during 2015, as the government allowed the largest devaluation to date.
The Nigeria 2016 budget is bench-marked on $38 per barrel with a deficit of about $2,2bn, but with most analysts agreeing that the price of crude oil might slide to low as low $18 per barrel, Nigeria and other OPEC countries must brace up for a turbulent ride. Global oversupply is currently within 500,000 to 2 million barrels per day, and could reach 3 million if Iran lives up to its word to add up to one million bpd as soon as possible.
The new OPEC reference basket of crudes (ORB) is made up of the following: Saharan Blend (Algeria), Girassol (Angola), Oriente (Ecuador), Minas (Indonesia), 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).
