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The Iraqi government’s statement on the 2017 draft budget, released 27 September, adopts a $42/B oil price assumption that errs on the side of caution, albeit substantially less so than an earlier draft that envisaged $35/B. This was changed on the recommendation of the IMF which considered the initial price too low and which is finalizing arrangements for a $5.34bn loan to the government (MEES, 23 September).
For August exports of Iraqi crude averaged $39/B, $8 below Brent. With front month Brent futures currently trading at $48-49/B, and 2017 contracts around $3-4/B above this, Iraq’s 2017 oil price assumption is around $1-3/B below that implied by current futures prices. (CONTINUED - 932 WORDS)