Rip up the dated and simplistic oil rule book we have been running the country with because there is a new game in town and it doesn’t look good for slow moving and moribund Nigeria.
Oil prices are falling and the generally accepted market principles that drive prices are starting to look out of date.
The Naira will fall.
There was a time when disruption in relations between OPEC nations would have made the oil price increase due to fear of disruption in supply.
However, the fall of over 5% in recent days, despite the regional ganging up on Qatar has confounded this view.
Shale oil, Russian intentions, greater Libya and Nigerian production have all meant the price has fallen.
Sentiment in the wider commodities market is subtly shifting as well.
Predictions of electric car penetration and usage by 2030 as well as other future market factors are leading traders to search for other cash cows.
Smaller current signs include the privatization of Saudi Aramco and the search for a stock exchange to list on with less accountability i.e. one where disclosures can be hidden also point to market trouble.
Disclosures that point to shrinking asset base and increased costs are not exactly music to investor’s ears.
Beware the Naira petro-dollar.
OPEC will soon collapse under the stain of diplomatic and economic pressure.
This will leave Nigeria unable to approach its big brothers with the begging bowl requesting action that props up the prices.
Ibe Kachikwu will be exposed as the ineffective peacock he is and we will all be scratching in the dust searching for the real economy that Godwin Emefiele and his friends have told us so much about.