Checking the figures: Okonjo Iweala, left, with Otunla, right and and Okogu, centre

For the first time, since oil prices began their downward spiral into the valley, the price of the Brent crude has sunk under $50 hit by OPEC’s production stance, oversupply, weak demand and the strong dollar.

In morning London deals, Brent North Sea crude for delivery in February dived to a 5.5-year low at $49.81 a barrel. New York crude had already slumped under $50 on Monday.

“The move below $50 shows how momentum is everything here,” CMC Markets analyst Michael Hewson told AFP.

“With no sign that OPEC will do anything about over-production, it seems likely that we could well see further declines towards $40 in the coming weeks — particularly given that demand shows no signs of picking up.

“Weak growth and weak demand in China and Europe are likely to continue to be the main drivers as the battle for market share intensifies. We’ll probably still see sharp swings in the interim but the direction of travel seems clear, unless OPEC acts.”

Crude futures had tumbled Tuesday to fresh multi-year lows in another stormy day for global financial markets, as OPEC kingpin Saudi Arabia blamed weak global economic growth and said it will stick to its guns on production policy.

On Monday, Saudi Arabia reportedly cut its European and US export prices in order to maintain market share.

Oil has lost more than half its value since June owing to a global supply glut and slowing growth in major world economies that has hurt demand.

Losses accelerated in November after the 12-nation Organization of the Petroleum Exporting Countries (OPEC) cartel decided not to cut output in response to lower prices and oversupply.

OPEC opted to keep its oil output ceiling at 30 million barrels per day (mbpd) despite ample global supplies.

Analysts said the move was aimed at stifling competition from new market players with higher costs — in particular US shale oil producers.

The implication of the turmoil in the oil market is that it puts Nigeria’s N4.3 trillion budget into crisis, since Nigeria depends on oil income to fund more than 70 per cent of the budget.

The budget was based on a Nigerian benchmark of $65, which was set around the time that the Brent crude was selling for around $60.

The optimism of a rebound by the Dr.Ngozi Okonjo-Iweala team appears now to be misplaced.

Analysts expect the economic team to re-examine the budget all over again and trim drastically the recurrent expenditure, which was expected to eat 91 per cent of the N4.3trillion budget.