*OIL PRICE SKYROCKETS 23% IN TWO DAYS IN BIGGEST RALLY IN SEVEN YEARS
*PRICE REBUNDS TO US$32 A BARREL
*US$38 A BARREL NEEDED TO STABILIZE NIGERIA ALONE IN 2016
*NIGERIA HAS 185 MILLION, MOSTLY YOUNG PEOPLE
*TENS OF MILLIONS OF NIGERIANS COULD SOON HEAD TO EUROPE IF LOW OIL PRICES WRECK GOVERNENT AND ECONOMY, AND THEN THERE ARE THE OTHER AFRICA COUNTRIES DEPENDENT ON OIL EXPORT REVENUE…
*RUSSIA AND MIDDLE EAST ALSO ON THE VERGE OF COLLAPSE DUE TO LOW OIL PRICE
*KLAUS SCHWAB PREDICTED ONE BILLION MIGRANTS COULD MOVE NOTH AS A RESULT OF OIL PRICE AND COMMODITIES COLLAPSE
The price of oil soared 23% in two days in biggest rally in seven years. But can the rally be sustained?
Oil prices rose above US$32 a barrel on Friday ostensibly after U.S. government data released Thursday morning oil showed that oil supplies were lower than expected.
It is only speculation but the real reason for the price rise and sudden release of US data could be related to a threat by Saudi Arabia and OPEC countries to sell some of their vast holding of US debt in retaliation for the US Treasury’s apparent use of its Economic Stabilization Fund to collapse the price of oil while working hand in glove with banks like Goldman Sachs and JP Morgan, who can easily manipulate the price on the futures market.
But the oil price will have to surge again to at least US$38 and stay at that price for countries like Nigeria to be able to stick to its budget plans for 2016.
Nigeria’s President Muhammadu Buhari administration has begun plans to diversify the economy and make it less oil dependent. But this plan will take time to work and require oil to be at a price of at least US$38.
Davos executive chairman Klaus Schwab warned that as many as a billion migrants could move north to Europe as a result of plunging oil prices.
As the crash in commodities prices spreads economic woe across the developing world, Europe could face a wave of migration that will eclipse today’s refugee crisis, says Klaus Schwab, executive chairman of the World Economic Forum.
“Look how many countries in Africa, for example, depend on the income from oil exports,” Schwab said in an interview ahead of the WEF’s 46th annual meeting, in the Swiss resort of Davos. “Now imagine 1 billion inhabitants, imagine they all move north.”
Nigeria alone has a population of about 186 million. The average age in Nigeria is about 18 years.
If the oil price collapse destabilizes the country and wrecks the economy, a sizeable number of those 100 million or so young people could head north to Europe.
Apart from Nigeria and other Africa states, Russia, Saudia Arabia and other Middle East states are all facing collapse due to the plunging oil price.
The Russian government could collapse in as little as 18 months unless oil prices rise, according to some estimates.