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By Adam Montana
OPEC deal important for oil market stability: Iraqi PM
By Mohammed Rwanduzy 2 hours ago Iraqi Prime Minister Adil Abdul-Mahdi addresses reporters during his weekly press conference in Baghdad on July 2, 2019. Photo: Iraqi PMO video ERBIL, Kurdistan Region — Iraq’s premier praised the OPEC deal to on Tuesday staying oil production cuts for nine more months because it is important for market stability as Baghdad is so heavily dependent on oil revenue.
“This is important for market stability. This topic, for us, the Kingdom and all the producers and exporters of oil is important because budgets depend on oil market stability,” Iraqi PM Adil Abdul-Mahdi told reporters in his weekly press conference on Tuesday. Members some non-members of the Organization of Oil Producing Countries (OPEC) met in Vienna this week. Following a prior agreement on Monday between Saudi Arabia and Russia, the cartel agreed to extend production cuts of 1.2 million barrels per day (bpd) for nine more months until March 2020 in a bid to push global prices higher.
The agreement was based on the Saudi desires to “face market developments and preserve the measures undertaken”, the PM Abdul-Mahdi revealed, adding that he had a phone call with Saudi King Salman prior to the deal.
According to Iraqi Ministry of Oil statistics for the month of June, Iraq’s oil revenue fell from $7.38 billion in May to $6.4 billion in June as its exports fell by 6 percent, from 111 million barrels in May to 105 million barrels in June.
Iraq exports around 3.5 million barrels per month — the second highest crude oil producer in OPEC.
Iraq has agreements, especially a mega deal with the US giant ExxonMobil, to develop its southern oilfields to increase its production capacity. However, due to a missile that hit the main headquarters of the company in Basra, some foreign staff were evacuated in June.
The attack against ExxonMobil came amid soaring US-Iran tensions; Iraq could be negatively impacted if the hostilities breakout between Iran and the US.
However, it also raised questions about Iraq’s ability to provide a secure atmosphere in which foreign companies could invest in the decades-deprived oil sector. It has been reported that Iraq could act as Iran’s “ATM” to provide a loophole for US sanctions.
Abdul-Mahdi, in his typical understated manner downplayed the incidents against energy and other companies working in Iraq, claiming they do not exceed those in “other countries.”
“The security measures are crystal clear. Yes there have been threats, but no real security violation has taken place to any of our oil and non-oil installations. We undertake all measures,” he said.
Some ExxonMobil employees have returned, the PM claimed, without elaborating.
Separately, the PM also touched on connecting Iraq’s electricity grid to Arab and regional electricity grids — namely Jordan, Syria, Saudi Arabia, Turkey and Egypt.
“We haven’t concluded this matter. It is still in the discussion stage. There is both a technical and a financial aspect to it. This is not something that [doesn’t entail] certain financial burdens, extending networks, and costs for these units,” the PM said, though adding the discussions are “serious.”
“We, as Iraq, have to be connected to [electricity] grids just like the countries of the world,” he emphasized.
Iraq does import electricity from Iran, but there needs to be greater interconnection with other regional countries, the PM posited.
Iraq’s electricity grid is aging and strained by an increasing population, reconstruction and development. Usage also peaks in the summer months as temperatures in the south soar over 50 Celsius. The hours of government-produced electricity varies greatly across Iraq and the Kurdistan Region by geography.
Iran sanctions could soon push oil prices above $90 a barrel, Bank of America Merrill Lynch says
“We are in a very attractive oil price environment and our house view is that oil will hit $90 by the end of the second quarter of next year,” Hootan Yazhari, head of frontier markets equity research at Bank of America Merrill Lynch, said. On Tuesday, the U.S. demanded that all countries halt imports of Iranian crude from early November. The Trump administration’s hardline position comes as part of a broader push to try to further isolate Tehran both politically and economically. International benchmark Brent crude traded at around $78.18 on Thursday, up around 0.7 percent while U.S. West Texas Intermediate (WTI) stood unchanged at $72.72. Sam Meredith | @smeredith19
President Donald Trump’s sustained bid to disrupt Iran’s petroleum exports could soon help to push oil prices above $90 a barrel, analysts told CNBC on Thursday.
Crude futures were seen hovering close to multi-year highs during early afternoon deals, after a bigger-than-expected drop in U.S. stockpilesadded to a rally fueled by a major Canadian supply outage, concerns about Libya’s exports and efforts by the Trump administration to cut off funds from Iran.
“We are in a very attractive oil price environment and our house view is that oil will hit $90 by the end of the second quarter of next year,” Hootan Yazhari, head of frontier markets equity research at Bank of America Merrill Lynch, said.
“We are moving into an environment where supply disruptions are visible all over the world… and of course President Trump has been pretty active in trying to isolate Iran and getting U.S. allies not to purchase oil from Iran,” he added.
International benchmark Brent crude traded at around $78.18 on Thursday, up around 0.7 percent while U.S. West Texas Intermediate (WTI) stood unchanged at $72.72.
Saudi Arabia is ‘genuinely worried’
On Tuesday, the U.S. demanded that all countries halt imports of Iranian crude from early November. The Trump administration’s hardline position comes as part of a broader push to try to further isolate Tehran both politically and economically.
Nonetheless, most major importers of Iranian crude have balked at Washington’s almost unilateral policy towards Iran.
The move followed OPEC’s decision to ramp up crude production last week. The Middle East-dominated cartel is looking to moderate oil prices after a rally of more than 40 percent over the last 12 months.
The 14-member producer group took action as Venezuela's dwindling output, the looming disruptions to Iran's supplies, and production declines elsewhere raised concerns about crude futures rising enough to dent global demand.
“You do not want to give Jeff Bezos a seven-year head start.” Hear what else Buffett has to say “Saudi Arabia is genuinely worried, perhaps even panicked, about supply losses from Iran — something it simply cannot be seen to say publicly — and the likely price spike that will result,” analysts at Energy Aspects said in a research note published Thursday.
By Half Crazy Runner
Can anyone explain to me why must they pass the HCL law before there can be a revaluation of the dinar? What is the connection? It certainly doesn’t look like the GOI will ever agree on this or even bring it up for a vote. They keep pushing it off to the “next session” year after year... Is it at all possible that we can ever see an RV without the HCL law passing?
We have on this web site a plethora of information from years of research. I would like to start a discussion about possible time frames for an RV, RI, or float. Where ever you stand about what may happen, let's here it. Please only bring your opinion if it can be backed up by any evidence. Most of us have read most of what has been written about the dinar. Please don't bring up rates, just a probable time frame for what most of us wait for.
Me first and why. I believe that from all the information I have read, within the 1st quarter of this year the dinar will go international. Honestly I thought it would have happened by now. My number 1 reason for my belief is that the corruption associated with the currency auction is widely publicized and must end. Al Abadi runs for re election against corruption, its has to end. IMO, al abadi should be nominated for the Nobel peace prize. Is he without sin....no, he is undoubtedly the best anyone could hope for.
Please share your opinion on time frame and why. Thanks for sharing.
Luigi says... If these guys know what they are talking about, the RV will have a slow gradual increase, not an overnight event. If true, exchange enough to get you by, then hold off for 90 days for the big payload. What say you? Not verified. Your opine. 10-17-2017 Intel Guru Frank26 IMO...THE RI IS COMING...AND INTROS A FREE FLOAT...THEN FOR ABOUT 70 TO 80 DAYS LATER THEY WILL CAP WITH A CONTROLLED FLOAT OF THE RV... [RI to a free float, then to a cap where it will be managed. Once they reach the cap rate, do you think it will stay in that range or drop back down?] FIRST OF ALL...RI IS THE FREE FLOAT... NOT TO IT...TIME IS NOT REQUIRED FOR THAT PHASE...SECOND ...ONCE CAPPED AT PEAK OF RV IS BECAUSE THE IQD WILL...NEVER NEVER NEVER EVER GO DOWN ONCE AT RI / RV. [Is the RV the same as an international rate?] WELL...I SUPPOSE...FOR AN RV INTRODUCES THE IQD TO THE INTERN MARKETS THAT WANT TO GET THEIR HANDS ON IT TO USE IT IN TRADE ...BUYING AND SELLING WHICH WILL ROCKET THE VALUE OF THE IQD INTERNATIONALLY. [This is not meant to be a rate...What opinion do you...have that will be the high vs low for Iraq’s currency at his peak rate post RV?] IMO...RI 1 RV 4... 10-16-2017 Newshound/Intel Guru Randy Koonce So learning from the mistake that Kuwait made, the CBI said the 'Float' will be 'Managed'... What does Managed mean?... if you look at the currency now and realize it has been this price for at least 10 years - that's a Managed Float! ... They control the rate.... they peg it off of the Dollar and the British Pound so that it will not move unless they want it to. Which is the reason they will need to RV the currency to get the rate they need...Are there any Laws that need to be passed before they let this go? NO! Everything is just waiting on Iraq to do this 'Thing'! Do not get discouraged! Just put on your big girl panties (or big boy, as the case may be) and let this happen. Be happy about the timing... We are close. Every large bank will exchange.. RELAX the RV is coming... Breathe,,, Check www.cbi.iq every day to see if it has changed.