"Tidbits From TNT" Monday Morning 3-7-2022

Mar 7

TNT:

Tishwash: Crazy rise in oil and gold prices.. Brent near 130 dollars a barrel

Global markets started the week with crazy rises in oil and gold prices with the escalation of the Russian-Ukrainian war, and fears of imposing sanctions on Russian oil exports by the West.

Brent crude prices jumped by more than 9% at the opening session of Monday, March 7, 2022, exceeding the level of $130 a barrel, before futures contracts for April delivery settled near $129, an increase of nearly $10 from the last close last Friday.

As for US oil, it also made a jump of about $10 from its last close on Friday, and West Texas Intermediate crude rose about 9% above the level of $125 a barrel.

Gold is now less than $15 below $2,000 per ounce.

Gold is considered a safe haven and a hedging tool for investors in times of crisis.

The International Energy Agency announced that Ukraine had reported that Russian forces had taken control of the Zaporozhye plant, and that Russian forces had changed mobile phone networks and Internet connections, and thus the Ukrainian authorities were no longer able to acquire information through traditional channels.

For his part, US Secretary of State, Anthony Blinken, announced that the United States is in the midst of discussions with allies in Europe about imposing a ban on European countries' imports of Russian oil.

And oil prices recorded big jumps during the past week and the first of March, the highest in 10 to 14 years.

Brent crude rose by about 20.5% to close above levels of $ 118 a barrel, and West Texas crude also rose by more than 25% to close above levels of $ 115 a barrel.

The prices of Iraqi oil (Basra Heavy Crude) rose, surpassing the $100 per barrel barrier by dawn on Saturday, March 5, 2022, Baghdad time.

Basra Light Crude touched $104 a barrel two days ago, before declining by 4%. link

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Tishwash: Specialists: Benefiting from oil revenues depends on approving the budget (3/7)

Specialists in economic affairs stipulated the adoption of the federal budget law, with the aim of achieving the highest possible benefit from oil revenues, whose prices jumped to approach the $120 barrier, as a result of the global crisis caused by the battles between Russia and Ukraine, stressing that without approving the budget, the exchange rates It will continue the approach of last year itself, based on the Financial Management Law, while they suggested using the financial abundance to expand investment spending and increase the Central Bank's initiatives to finance projects.

Oil prices witnessed successive jumps due to the Russian-Ukrainian crisis, reaching the limits of 120 dollars per barrel, a price that black gold has not reached since 2008, while Iraq’s oil exports recorded the highest rate in two years, reaching last February, according to the Oil Marketing Company. (SOMO), 3.314 million barrels per day.

Approval of the budget

The economist, Manar Al-Obaidi, who expected the continued rise in oil prices globally, believes that this rise will not achieve direct economic benefit unless the budget is approved, stressing that “without approving the budget, the exchange rates will continue the approach that took place last year, depending on the law The financial administration, which authorized the Iraqi state to continue spending in the months in which the budget was not approved at the same rates as the previous year.”

Al-Obaidi suggested that the budget for the current year 2022 would not be approved soon, attributing this to the “political blockage and the delay in forming the government,” which needs time after its formation to present this year’s budget.

financial reserve

Al-Obaidi also expected, that the rise in oil prices would cast a shadow on the rise in the prices of various materials, because an important part of the price structure is transportation, as well as the rise of various materials, which means that we will face a continuation of the high prices of various materials, including food, and others as a result of high prices and high prices. transportation cost.

The spokesman pointed out, "The rise in oil prices without the ability to increase spending as a result of the absence of the budget will raise the reserves of the Iraqi state and the reserves of the Central Bank, which will contribute to strengthening the currency, and raising its real value against the dollar as a result of the rise in reserves."

investment spending

Al-Obaidi stressed the need to expedite the formation of the government and submit and approve the budget, in order to exploit the revenue generated from the rise in oil prices, to increase investment spending and to work on building real projects and infrastructure that improve the work environment and develop various sectors.

The economist urged to increase the initiatives of the Central Bank, and to work with banks to finance projects of various orientations, and to focus on economically weak governorates and important sectors, specifically the agricultural and water sector, because of their importance in achieving food security, which has become a strategic necessity as a result of many global factors, including climate changes and wars. The international community that reduces the global production of various crops, calling at the same time, the importance of focusing on providing initiatives to support very small projects for various unemployed youth in order to create an enterprise sector small.

Program balancing

For his part, the economic expert, Dr. Bilal Al-Khalifa, stressed the need to exploit the financial abundance achieved as a result of the high oil prices in approving the budget of programs and plans, and to overcome the mistakes that occurred in the past, stressing that “all previous budgets were item budgets, and they are usually similar to the copy that preceded it, with a change in the price of a barrel of oil, which is usually the basis for calculating the volume of spending and the deficit.”

With the aim of achieving economic gains, the Caliph stressed the need to reduce public spending in the next budget, indicating that this step represents the success of the reform plan, taking into account the increase in non-oil revenues, and reducing dependence on oil revenues, as well as giving priority and attention to investment projects in the productive sectors. other non-oil. link

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Tishwash: Iraq is off the (grey) list for money laundering (3/7)

The International Financial Action Task Force (FATF), which is concerned with monitoring the implementation of standards for money laundering and combating the financing of terrorism in central banks in the countries of the world

Consisting of 39 members and headquartered in France, issued its statement yesterday, Friday, in which it announced a list of 20 Arab, foreign and regional countries, drawn up by In the (gray) monitoring area, which are countries whose international dealings are marred by suspicions, which will affect their international banking relations and require them to take measures and policies to reduce suspicions and prove their strict adherence to international standards for combating money laundering and terrorist financing.

What concerns us in the aforementioned statement is that Iraq is outside the list of countries under surveillance, and this means that the Central Bank of Iraq continues to abide by international standards for compliance and anti-money laundering and terrorist financing rules, and that its international banking transactions are not tainted by any negative comments, and that Iraq has maintained a disciplined manner since the year 2018 when it was within the control area (gray) and was moved to the green zone, which is the normal follow-up area, every two years, to which all countries committed to international standards are subject, and this was previously achieved by Iraq when the Central Bank liquidated about 700 notes on his international banking dealings.

And that the important and basic thing is that Iraq was able during the years 2020 and 2021, which are the years of crises, challenges and economic, financial and epidemiological shocks, to strengthen and activate controls, instructions, self-regulation, institutional and legal control, control the movement of foreign exchange, control the movement of imports and foreign remittances, and strengthen banking relations with countries of the world and issue instructions The sale and purchase of foreign currency for the year 2021, which enabled it to maintain its position in the assessments of the International

Financial Action Task Force.

This was reinforced by the efforts made by the Central Bank and the Ministry of Foreign Affairs to convince the European Union of its decision to lift the name of Iraq from the high-risk countries last month.

* Economic and banking consultant link

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