What these means for Nigeria; The country’s foreign exchange reserves declined from $45 billion recorded in June 2019 to around $35.22 billion in May 2020 due to low crude oil prices. A decline in crude oil prices hurts Nigeria’s foreign earnings because Nigeria’s main source of funds is crude oil.
However, OPEC (Organization of Petroleum Exporting Countries) and major oil producers including Russia, a group also known as OPEC+, are reducing their crude oil production by 10 million barrels per day in May-June to support crude oil prices as measures to curtail relative weak demand for crude caused by COVID-19.
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“Early estimates suggest gasoline demand is down by as much as 30% from last year as people stay close to home,” ANZ Research said in a note to Reuters.