NIGERIA’s N8.91 trillion ($29billion) came under severe threat as oil prices dipped on Monday after new tariffs imposed by the United States (U.S) and China came into force. This raised concerns about a further hit to global growth and demand for crude.

Brent crude slipped 16 cents to $59.09 a barrel while U.S. benchmark WTI crude was down seven cents at $55.03 a barrel.

The National Assembly said the 2019 budget was aimed at consolidating growth and approved a budget deficit of N1.9 trillion, representing 1.37 per cent of the nation’s gross domestic product (GDP).

The budget was based on estimated crude production of 2.3 million barrels per day (bpd); $60 pb benchmark; and an exchange rate of N305  to the dollar.

Nigeria, Africa’s largest oil producer and member, Organisation of Petroleum Exporting Countries (OPEC)  grew by its economy by 1.93 per cent last year, its fastest pace since a recession two years earlier, data showed, while annual inflation rate  increased to 11.37 per cent in April 2019 from 11.25 per cent in the prior month.

Meanwhile, OPEC’s crude production rose last month, the first increase since the group and its allies started a new round of output cutbacks at the start of the year to shore up a weak global market. Nigeria and Saudi Arabia led the boost by the OPEC, which collectively increased by 200,000bpd to 29.99 million bpd, according to a Bloomberg survey.

The survey is based on estimates from officials, ship-tracking data and consultants including Rystad Energy and JBC Energy GmbH. OPEC and its partners, a 24-nation coalition known as OPEC+, agreed to reduce output by 1.2 million barrels a day at the beginning of 2019 as a faltering global economy and booming U.S. shale-oil production threatened to leave world markets with a glut. That deal replaced a previous round of curbs that began in January 2017.

The strategy has struggled to shore up prices against a deteriorating outlook for global growth and a seemingly intractable trade war between the U.S. and China.

Bigger-than-planned cutbacks by the Saudis are now only just balancing out cheating by other OPEC members.

Nigeria hasn’t made any of the cuts it pledged, and increased output again in August, by 60,000 barrels a day to 1.95 million, the highest level since early 2016. The West African producer has ramped up production to maximum levels at its new Egina offshore oil field operated by Total SA, according to the International Energy Agency. Russia, the biggest producer outside OPEC in the coalition, has also shown signs of backsliding on its commitments.

The U.S. began imposing 15per cent tariffs on a variety of Chinese goods on Sunday – including footwear, smart watches and flat-panel televisions – as China put new duties on U.S. crude, the latest escalation in a bruising trade war.

U.S. President Donald Trump said the two sides would still meet for talks this month. Trump, writing on Twitter, said his goal was to reduce U.S. reliance on China and again urged American companies to find alternative suppliers outside China.

“Even as President Trump has indicated that scheduled talks between the U.S. and China are still to proceed, the market is more and more resigned to a protracted stand-off between the two countries and will be looking towards central bank easing to shore up risk appetite,” BNP Paribas’ Harry Tchilinguirian said.

Beijing’s levy of five per cent on U.S. crude marks the first time the fuel had been targeted since the world’s two largest economies started their trade war more than a year ago.

Elsewhere, oil output from members of OPEC rose in August for the first month this year as higher supply from Iraq and Nigeria outweighed restraint by top exporter Saudi Arabia and losses caused by U.S. sanctions on Iran.

In the U.S., energy companies cut drilling rigs for a ninth month in a row to the lowest level since January last year.