417,000bpd oil cut’ll deepen Nigeria’s recession, says Fitch

A global credit ratings agency, Fitch Ratings, has said Nigeria’s compliance with the oil production cut deal led by the Organisation of Petroleum Exporting Countries will lead to deeper economic cont

raction and fiscal deficits.

OPEC and its partners, led by Russia, a group called OPEC+, agreed in April to cut output by 9.7 million barrels per day in May and June, representing about 10 per cent of global supply. “Despite the OPEC+ deal, our oil price forecasts remain unchanged at $35/barrel for Brent on average in 2020 and $45/barrel in 2021.”

“We expect outflows to materialise later in the year, which, alongside a significant current-account deficit and continued CBN resistance to overhauling the exchange-rate framework, will drive a fall in international reserves from $38.6bn at end-2019 to $23.3bn at end-2020.”

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