That is the expectation, but I think that the actual amount maybe smaller. You see the Iranians were selling their oil, via trucks within their region, yes even during the sanctions. This is well documented. Thus the actual impact may not be that much. The main issue are the reserves and most importantly the Saudi standpoint. You see the Saudis wanted to destroy the Shale oil production by making it costly. They hoped that buy over supplying and pushing the price down they would drive Shale producers out of business. That has backfired a bit. Also note that US has started to become a net oil exporter for the first time in many years and China growth is slowing so less use. Yes we could see as low as $25.

As for the Naira, this will fall further and I see a N/$ at 400-450 at year end. I would explain how I go to that, but will spare you my boring calculations.

Seun:
This means the oil price will drop further since Iran is now free to export their oil to US and all European countries. The naira will also drop.

The question now should be how do we diversify our economy?

Bishops10:

Ok sir

But







The kids will still grow to start from where the so called adults stopped

It will be too late to catch up

For me I think the way forward for Nigeria are:

(1)Stop exporting crude oil build more refineries then export crude oil refined products like petrol gas diesel jet fuel petrochemical etc

(2) Commercial and industrial intensive agriculture and agric-processing with export focus

(3) Solid minerals and processing

(4) China style of government sponsored State and private manufacturing focusing on exporting to the European and the United States market.

Simple as ABC...

But the will power from the government is where the problem lies.

Many of the shale operators going out of business are the smaller players. The bigger operators are a lot more resilient and are spending a lot of money to find cheaper ways of extracting shale oil.

At some point the industry will align to lower prices by cutting costs etc but I just don't see prices going back that high.

Also don't forget these shale operators are independent so if prices rise to a certain point where it is economical for them, they just restart production an prices will fall again.

The US exported oil to China for th first time ever this week after the lifting of of export ban. Iran plans 500000 bpd and is targeting India the same importer all exporter wants to sell to after the slowdown in China.

I believe there will be continued innovation in shale and other non conventional sources of oil. No one wants to be at th mercy of the few oil exporters.

Also I read that China used to opportunity to double it's strategic oil reserve to 190 million barrels which means if oil rises soon too quickly they can influence it by using their reserve to push down demand. The oil boom is over and the likes of Nigeria and Venezuela need to face the new reality.

ladyF:

the low prices is driving a lot of companies out of business. A lot are making losses, no new exploration. At the end of the day, with this current prices, it will get to a point where a lot of people will stop production because it is not sustainable, hence supply will certainly fall.

The truth is the low oil prices cannot last forever. Everybody is bearing the brunt, big & small companies inclusive. It is just not sustainable.

Lighthouseman:

Commodity prices are down because of the slow down of the Chinese economy. We can only farm to feed but for trade..... Forget it until 2020.
International Agric business are done years ahead based on orders and I don't think we have such for now.
Agric Wil continue to sleep until marketing boards are brought back so that farmers would know before the commence production the guaranteed market price.
Secondly, our use of land would have to be reviewed because agricultural lands are shrinking. Where u currently built ur house was most probably a farm land due to massive urbanization. Residential areas should be well mapped out, encourage the building if sky scrapers or high rise buildings to minimize land use
Agric has gone through modernization so lot of know how is involved. Let's do lot of research on hybridization, short duration crops & extension services with private sector involvement.
My doubt Is apc is a socialist oriented government which would have its hands tied.

Nigeria has a vast almost inexhaustible expanse of arable land, and at this point, urbanisation poses no significant threat to their availability. When you travel around the rural areas, you appreciate the point I'm making.

I agree that we need to commit more resources to funding research to improve on the production of high yield crops that could be draught and disease resistant and I wanna believe work is already in progress in this field.

Obasanjo did it with cassava and it was a huge success, so much so that we almost toppled Brazil as the number 1 exporter world wide- my PG thesis bothered on this so I know exactly what I'm saying.

Whether socialist or capitalist, remember what they say- necessity is the mother of all inventions and "them no dey tell blind man say rain dey fall". Therefore, I don't think that would in any way hinder the government from doing what they know is right to salvage the situation.

We can begin by trading with other African countries, after all, they'd make purchases in dollars. From there, we can expand to Europe and the rest of the world. Crops like groundnut, sesame seeds, cashew nuts, cola nuts and guinea corn do very well here and are in high demand in the west. We can improve our productivity, enter some bilateral trade agreements, exploit the opportunities of AGOA and launch ourselves out of the present quagmire.

I believe we can.

hahn:


Thanks for your response. The thing is, this explanation sounds too obvious. I appreciate your reply though

. Yeah, it's very obvious!

The only good thing this drop in d price will do is that it will help eliminate all the deadly crisis like wars and agitations and terrorism (majority of these crisis are sponsored with oil money) some agitations are because of oil, some international wars all borders on oil. All these are because oil business is a lucrative business, let me now see if people and country will kill for a worthless mineral resources. There will be no money for all those foreign multi nationals to sponsor civil unrest in some of those areas blessed with abundant oil deposits.




Na only my country "naija" I de pity.

omenka:
Nigeria has a vast almost inexhaustible expanse of arable land, and at this point, urbanisation poses no significant threat to their availability. When you travel around the rural areas, you appreciate the point I'm making.

I agree that we need to commit more resources to funding research to improve on the production of high yield crops that could be draught and disease resistant and I wanna believe work is already in progress in this field.

Obasanjo did it with cassava and it was a huge success, so much so that we almost toppled Brazil as the number 1 exporter world wide- my PG thesis bothered on this so I know exactly what I'm saying.

Whether socialist or capitalist, remember what they say- necessity is the mother of all inventions and "them no dey tell blind man say rain dey fall". Therefore, I don't think that would in any way hinder the government from doing what they know is right to salvage the situation.

We can begin by trading with other African countries, after all, they'd make purchases in dollars. From there, we can expand to Europe and the rest of the world. Crops like groundnut, sesame seeds, cashew nuts, cola nuts and guinea corn do very well here and are in high demand in the west. We can improve our productivity, enter some bilateral trade agreements, exploit the opportunities of AGOA and launch ourselves out of the present quagmire.

I believe we can.

To fully capitalize on the things you suggest will require substantial investment in road and (especially) rail transport infrastructure, as well as improved air and sea-port facilities. All of these things will require huge amounts of money to make a difference, and such large sums will be most easily raised from private foreign investment. Too bad the current government is doing nothing to actually encourage such FDI.

Academicwizman:

. Yeah, it's very obvious!

In Nigeria, nothing is obvious

.

tempest01:
it won't reach 10...What is the cost of production? Oil has an inelasticity of demand effect, meaning that the price is not affected much by quantity supplied.

If opec (which Nigeria and iran are part of) wants to increase oil price tomorrow, they will.

The problem with the oil price is with US and their shale oil.

You could be right. In the recent past, whenever there is disruption of supplies perhaps by some conflict in the mideast, the market reacts dramatically with a spike in price. But today, most parts of the mideast is embroiled in one conflict or another, yet, the price continues its downward spiral!

Something is awfully wrong somewhere and I don't think it is just the US shale that is responsible for the anomaly we are witnessing.

slimtriggaman:
My people brace up for all manners of taxation and government extortion in the form of levies, fines e.t.c..

taxed and be stolen abi!

Temmytea70:


It will be too late to catch up

Didn't get you sir

Temmytea70:


It will be too late to catch up

Didn't get you sir

mazeltov:
I don't have problem with this news. We all know that one day, the sanctions against Iran would be lifted. Of course the sanction can't everlasting as some people think.
My concerns focus on the weakling 'OPEC' organisation.
Honestly since the creation of Opec, I am yet to see its usefulness to the global oil market. I thought Opec would serve as a regulator to regulate these gluts. Sometimes we need to leave the players and blame the coach.
Opec is just too weak to control the output of crude oil into the global market. At least, Opec should be strong enough to impose sanctions on some giant countries like United States or even Venezuela if they outstep their production.

Thought that Buhari said that he will stabilise the global oil price, so what happened now? Why are you blaming OPEC when Buhari is there.

omenka:
You could be right. In the recent past, whenever there is disruption of supplies perhaps by some conflict in the mideast, the market reacts dramatically with a spike in price. But today, most parts of the mideast is embroiled in one conflict or another, yet, the price continues its downward spiral!

Something is awfully wrong somewhere and I don't think it is just the US shale that is responsible for the anomaly we are witnessing.

It's just the US shale in my own opinion....It's opec that brought the price down to this level to force us out of the market. If tomorrow, they tell all member States to cut production, in a week, oil will go back high. But their hands are tied because if they do that, Us will continue with their shale program which will take some market from opec and then finally drive the price low.

So it makes sense to keep the price low now and retain the market.

Cheechy:


ALL the more reason "TO READ ALL THOSE THINGS UP THERE"

Ok ma Thanks

The US is not aiming to monopolise the oil supply but simply to b energy independent so they are not at the mercy of a few oil producing countries.

This all started after the 1973 oil crisis where OPEC intentionally placed an oil embargo on America and the West causing an oil crisis. President Nixon pledged that America will be energy independent and every president since then including Obama has always made that a priority. It has always been public knowledge so there is no conspiracy here.

Even when shale started to grow everyone said it wasn't possible, it was a lie, it was Propaganda and now it is real and the US is pretty much energy independent and now an exporter.

Even China has massive shale gas reserves but have been unable to extract them as they are not close to water sources which are required to pump out the oil. You can be assured the Chinese government is spending money investing in finding a way to extract that oil and also be independent.

smitez:


Even a madman knows that was Americans intent all along.

I saidI read it somewhere.

How do we figure out if it was their intent or not?

What if they are interested in flooding the market with shale and pulling the world towards it?

What if the sink in crude price is in order to capture and monopolize the market?

Yanks101:
Then Nigerians should hope republicans win so as to re-enforce the sanctions on iran which they are clearly against its removal.
But then a republican presidency would be bad on immigrants anyway.
Stuck between the sea and the hard place.

negative mindset!the world is moving away from oil in the long run

bayonino:
if it was don jazzy and olamide news you go rent house for the page dey read dey go,.... Grow up kid!..i doubt if you know the implication on Nigeria crashing economy.

Thanks for the Advice sir

vfactor:


When the kid grows up, he will then learn to read those things!

Ok sir..Till then

mazeltov:
I don't have problem with this news. We all know that one day, the sanctions against Iran would be lifted. Of course the sanction can't everlasting as some people think.
My concerns focus on the weakling 'OPEC' organisation.
Honestly since the creation of Opec, I am yet to see its usefulness to the global oil market. I thought Opec would serve as a regulator to regulate these gluts. Sometimes we need to leave the players and blame the coach.
Opec is just too weak to control the output of crude oil into the global market. At least, Opec should be strong enough to impose sanctions on some giant countries like United States or even Venezuela if they outstep their production.

Not all oil producing nations are member of OPEC, and therefore, are not bound to obey it's directions.

omohayek:


To fully capitalize on the things you suggest will require substantial investment in road and (especially) rail transport infrastructure, as well as improved air and sea-port facilities. All of these things will require huge amounts of money to make a difference, and such large sums will be most easily raised from private foreign investment. Too bad the current government is doing nothing to actually encourage such FDI.

@bold: I don't think so. It is common knowledge that in every foreign trip the president has made to the West, and currently, Middle East, meeting with business men/community has always been a significant part of his itinerary. The outcome of these won't manifest overnight, but surely, with time, we'd see the influx of foreign businesses as testament to the president's diplomatic shuttles so far.

A little patience is all we need.

/
Good news for me!

Trailing stop in place and running.


\

PBundles:
As for the Naira, this will fall further and I see a N/$ at 400-450 at year end. I would explain how I go to that, but will spare you my boring calculations.

Indulge me. I love boring calculations.

omenka:
@bold: I don't think so. It is common knowledge that in every foreign trip the president has made to the West, and currently, Middle East, meeting with business men/community has always been a significant part of his itinerary. The outcome of these won't manifest overnight, but surely, with time, we'd see the influx of foreign businesses as testament to the president's diplomatic shuttles so far.

A little patience is all we need.

This is wat the president is meant to be doing, if he really wants to encourage foriegn direct investment, wenever he is travelling out to countries in the west and middle east like you rightly mentioned, he should invite other top business minded men/women in the country along, e.g the Dangotes, Elumenlus, Otedolas, The Adenugas etc, with all this sucessful bussiness men around him, foriegn investors can have full confidence in the economy @ large, dis is how president's across the world does to woe potential investors to their country.

poseidon12:

Shake oil is not an alternative to crude oil. Shale oil is also crude oil. Shale just refers to the new technology they are using to extract more crude oil which is different from the conventional drilling method.

Very wrong sir. Shale is oil or gas, and the technology used to extract shale is what is known as fracking.

Shale is not a technology.

otokx:
We may see sub $20 per barrel of oil.

I think a new stretch r that may work us the opec countries shud cut down the production.

This will raise the price.Simple economics says, this higher the demand as a result of scarcity, the higher the price.

omenka:
@bold: I don't think so. It is common knowledge that in every foreign trip the president has made to the West, and currently, Middle East, meeting with business men/community has always been a significant part of his itinerary. The outcome of these won't manifest overnight, but surely, with time, we'd see the influx of foreign businesses as testament to the president's diplomatic shuttles so far.

A little patience is all we need.

The thing is, hard-headed private investors don't care about what a leader says - talk is cheap - but about what he does. No foreign investor will look at policies such as

1. imposing a ludicrously large fine on MTN (dwarfing even the fine levied on Samsung for violating Apple's patents)

2. enacting ineffective but cumbersome exchange controls (instead of simply devaluing)

3. refusing to remove the fuel subsidy (when even the UAE and Saudi Arabia are doing just that)

4. declining to sell off the inefficient, obsolete NNPC refineries and completely deregulating the sector

5. giving support to pouring more money into the Ajaokuta white elephant

and see a government that is truly serious about all of the encouraging talk it is making towards them. If Buhari were to actually enact policies that were encouraging for foreign investment, he wouldn't need to travel the world to beg businessmen to come to Nigeria, as they'd be coming of their own accord. Instead, all that's been achieved despite all of Buhari's trips so far is that Nigeria has been removed from JP Morgan and Chase's bond index.

http://www.bloomberg.com/news/articles/2015-09-08/jpmorgan-to-remove-nigeria-from-emerging-market-bond-indexes

Im still waiting to buy a gallon for a dollar. It's 1.69 now so we getting there. Oya oil keep crashing since stupid Nigerian govt have been busy siphoning funds over the years. The only thing that hurts is the average nigerian suffers a whole lot more

I still dunno why there hasn't been an uprising in Nigeria yet even Libyans that had everything all rosy went gaga.
I guess it's cos ppl still haven't understood how much the govt elites have stolen and hidden in foreign economies.

Nigeria WAKE UP FROM YOUR SLUMBER !!! NOBODY WILL DO IT FOR YOU EXCEPT YOU

omenka:
You could be right. In the recent past, whenever there is disruption of supplies perhaps by some conflict in the mideast, the market reacts dramatically with a spike in price. But today, most parts of the mideast is embroiled in one conflict or another, yet, the price continues its downward spiral!

Something is awfully wrong somewhere and I don't think it is just the US shale that is responsible for the anomaly we are witnessing.

According to Christine Roman on CNN:
1. OPEC won't cut cost.

2. Iran is about to start selling ( Its location is strategic to Asian buyers).

3. China is slowing, so it needs less fuel to run it's economy, and other emerging market it operates in.

4. US is producing more oil than ever(Shale boom, plus not many producers shut production, like I said earlier, so many mergers and acquisition has been going on, and technology is improving. Lean business practices are also in full effect. Same applies in Canada, larger companies taking over smaller companies.

5. US dollar is very strong at the moment, as US dollar gets stronger, refined oil gets more expensive for overseas buyers hence it hurts demands and drives down prices of crude further.