Coronavirus panic also sent global stock markets and industrial and precious metals prices tumbling, with losses amounting to $5 trillion. The international oil benchmark, Brent crude, has tumbled below the $50 per barrel mark as the spread of coronavirus stoked fears that a slowing global economy would hit energy demand.
Brent, which rose to as high as $70 per barrel in January, has been on a downward trend since the coronavirus broke out, posing a threat to Nigeria’s budget for this year. The 2020 budget, which was signed by the President, Muhammadu Buhari, in December, was based on oil production of 2.18 million barrels per day with an oil price benchmark of $57 per barrel.
The Federal Government is looking to generate N2.64tn oil revenue, which is 32.34 per cent of expected total revenue for this year, with non-oil revenue projection being N1.80tn.Brent crude, against which Nigeria’s oil is priced, plunged to $49.67 per barrel on Saturday as of 9:50 am Nigerian time.
In early trading on Friday, Brent dropped below $50 per barrel for the first time in two and a half years but it later rose to settle at $50.52 per barrel. For the week, Brent has lost about 14 per cent, its biggest weekly percentage decline since January 2016, according to Reuters. The coronavirus spread further, with cases reported for the first time in six countries across three continents, battering markets and leading the World Health Organisation to raise its impact risk alert to “very high.”