Oil prices are at their highest levels in several years
Oil prices rose to multi-year highs on Monday, boosted by a better demand outlook as an increase in COVID-19 vaccines helps lift travel restrictions.
Brent crude rose 35 cents, or 0.47 percent, to $73.03 by 05:43 GMT. It rose 1.1 percent last week and reached its highest level since May 2019 at $73.09.
US West Texas Intermediate also rose 14 cents, or 0.2%, at $71.22 a barrel, after hitting its highest level since October 2018 at $71.24 and rising 1.9% over the course of the week.
Car traffic is back to pre-pandemic levels in North America and most of Europe, and there are more planes in the air as lockdowns and other restrictions ease, resulting in a three-week gain for oil standards.
The International Energy Agency said in its monthly report on Friday that the Organization of the Petroleum Exporting Countries (OPEC) and its allies, known as OPEC+, need to increase production to meet recovering demand.
The OPEC+ group was restricting production to support prices after the pandemic wiped out demand in 2020.
Goldman Sachs said last week that it expects Brent crude to rise to $80 a barrel this summer, as the start of vaccinations boosts economic activity around the world. link
IF BUDGET LAW NOT IMPLEMENTED WITHIN A MONTH, NEITHER SIDE HAS WILL TO ENACT AGREEMENT: PUK MP
If the budget agreement between Baghdad and Erbil is not implemented within a month that means that neither side has the will to do so, member of Iraq’s Council of Representatives’ Economic and Financial Affairs Committee Sherwan Mirza said on Monday (June 14).
Mirza, who represents the Patriotic Union of Kurdistan (PUK), told Voice of America (VOA) that lawmakers should conduct an investigation in order to determine responsibility.
Nevertheless, he said that the Kurdistan Regional Government’s (KRG) negotiating delegation was optimistic that the agreement in the budget law could be salvaged and implemented.
Under the 2021 Federal Budget Law, which passed on March 31, the KRG is supposed to receive 9.5 trillion Iraqi dinars ($6.5 billion) from the budget, which will be disbursed in monthly increments, in return for submitting 250,000 barrels of crude oil per day to Iraq’s oil marketer SOMO for export and a portion of the income derived from customs duties at international border crossings with Iran and Turkey.
The KRG has sent no money or oil. As a result, Baghdad has not transferred monthly cash infusions that would enable Erbil to pay public servants their full salaries. link
An economic specialist: The dollar is destroying the dinar as a result of the decisions of the Central Bank
A specialist in the management of state institutions in crises, Ali Jabbar Al-Fariji, confirmed that the dollar exchange rate broke the dinar exchange rate as a result of the decisions of the Central Bank and the Ministry of Finance.
Al-Fraiji said in a statement to the National Iraqi News Agency / NINA / that “the value of the local currency is an important factor in economic construction, and the strength of the local currency is one of the manifestations of the economic strength of any country – and this strength is determined by several factors, foremost of which are economic factors, including that the value of the currency is determined by what it has.” The country’s natural wealth and reserves (oil, minerals, gas and other wealth…) The value and strength of the currency is also based on the size of the monetary reserves, the country’s production and export capacity, and in the modern era, political and military factors also have an impact on the value and strength of the local currency.
Al-Fraiji pointed out that the decision to reduce the value of the dinar (the local currency) with the economic justifications presented by the Central Bank and the Ministry of Finance did not achieve the goals they invoked as evidence of the local market movement and the turbulent economic reality we live in now.
He added, “The effects of this unjustified rise in the value of the dollar against the dinar have become a factor of confusion in the local market, accompanied by many economic distortions that are added to the list of previous distortions, including the unrealistic rise in the real estate market, as well as the effects on the prices of consumer goods and services that have become a commodity controlled by many traders. Al-Furaji made proposals to confront this crisis in a balanced economic manner, which included:
First: Reconsidering the decision to raise the value of the dollar against the dollar – and setting a time limit for dealing with it, and it is possible to propose the end of 2021 to deal in the new exchange rate and restore the value of the Iraqi dinar after that.
Second: Starting a program to compensate financial losses fairly and quickly, especially for the vulnerable groups who work in the daily labor market. Supporting the labor market with soft loans within an economic program for projects prepared in advance with feasibility studies targeting (job-seeking forces) in creating small local industries.
Third: Tightening the economic control by the government and parliament on traders and speculators in the local market.
Fourth: A reduction in the (operating) budget in 2021 in proportion to the size of the financial crisis.
Fifth: Begin distributing plots of land serviced with infrastructure to counter the unjustified rise in the real estate market, and also follow up on real estate purchases by influential people and brokers who work with them. Reducing economic shocks, including (controlling real estate market rates and not allowing unjustified rises, pumping foodstuffs and other materials to support the purchase movement and controlling consumer prices).
Sixth: Preventing all kinds of external borrowing in 2021, and establishing a fund to monitor and manage loans in Iraq.
Eighth: Initiating compensatory and incentive strategies for the private sector (small businesses) as well as for the affected individuals and families through cash or in-kind assistance for months.
And the local markets in Baghdad and the provinces witnessed an unprecedented rise in the exchange rate of the dollar, as it reached 152 thousand dinars to 100 dollars. link
Source: Dinar Recaps
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