Nigeria Needs Crude Oil Price Of $139 Per Barrel To Balance Budget – Fitch Report

Nigeria needs an oil price of $139 a barrel to balance its budget this year, Fitch Ratings Ltd said on Thursday.

Fitch, an international rating agency, in an April 5 report, said Nigeria has the worst situation among 14 major oil exporting nations in the Middle East, Africa and emerging Europe.

Bloomberg reports that the agency said Kuwait is in the best position of major oil exporting nations to have a balanced government budget this year with oil forecast to average $52.50 a barrel.

The report noted that even after cuts in government subsidies and currency devaluations, 11 of them won’t have balanced government budgets this year, including Saudi Arabia.

“Fiscal reforms and exchange rate adjustments are generally supporting improved fiscal positions compared to 2015, but have not prevented erosion of sovereign creditworthiness,” the rating agency said.

It explained further that only Kuwait, Qatar and the Republic of Congo have estimated break-evens that are below Fitch’s oil price forecast for this year.

Kuwait at $45 a barrel traditionally has a low break-even because of its high per-capita hydrocarbon production and more recently its “large estimated investment income” from its sovereign wealth fund, Fitch added.

Earlier, Brent crude, a global benchmark, averaged about $55 a barrel for 2017.

The rating agency said it “substantially” raised the fiscal break-even prices for Nigeria, Angola and Gabon from 2015 levels because of rising government spending.

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A breakdown of the Fitch forecast 2017 break-even oil prices per barrel shows that Nigeria was pegged at $139, Bahrain at $84, Angola at $82, and Oman at $75.

Others are Saudi Arabia at $74, Russia at $72, Kazakhstan at $71, and Gabon at $66; as well as Azerbaijan at $66, Iraq at $61, Abu Dhabi, United Arab Emirates, at $60, Republic of Congo at $52, Qatar at $51 and Kuwait at $45.

(NAN)