International Energy Agency (IEA), in its November report, predicted that the economic downturn plaguing Nigeria and some other exporting countries as a result of the massive tumble in the global price of crude oil would persist all through 2016.
The doomsday prediction is scarier for Nigeria, which operates a mono-crop export economy dependent on oil.
From a global demand of 1.8 million barrels per day (mb/pd) in 2015, IEA, in the report released on Friday, said the demand for oil would plummet to an abysmal 1.2 mb/pd by next year.
The weak demand, the agency says, would be worsened by oversupply in the world market from both OPEC and non-OPEC countries – a situation that can see a country such as Nigeria, not finding any buyer for its crude oil in the global market.
At the moment, the oil glut has seen to a 1.6 million barrel supply surplus in the oil market in the past two years, whereas the optimal world consumption is benchmarked at 97mb/d.
The global energy agency observes that while there has been a decline in supply from countries such as Iraq and Kuwait, other oil producing nations such as Saudi Arabia, Nigeria and Libya have ensured that supply continuously outstripped demand.
IEA breaks down the surplus to translate to 710,000 barrels per day in this last quarter of 2015, which it observes outstrips that of any other quarter since the free fall of global oil price began in 2014; and higher than any other quarterly surplus in the last 10 years.
Currently, a lowly $44 per barrel is what crude oil goes for in the international market.
Rather than move up, global industry watchers as well as the IEA report establish that the price would further go downhill. As recently as June 2014, oil price reached a premium of $101pb, but by December the same year, crashed to $52pb.
Price volatility is traditional with oil in the global market. In 2008, oil price climbed to $140 pb, all-time high, but by the last quarter of the same year, tumbled down to $40 pb.
The degree of the December, 2008 oil price crash and that of December 2014, are characterised by global industry watchers as the biggest drops in oil prices, within a year, since 80s.
-Leadership