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Middle East News
Iraq’s Parliament Approves 2015 Budget Following Oil Price Debate
Budget is Based on $56 a Barrel, Lowered From $60 a Barrel in Earlier Drafts



By
Ghassan Adnan and
Nour Malas
Jan. 29, 2015 2:36 p.m. ET
0 COMMENTS

BAGHDAD—Iraq’s parliament has approved the country’s 2015 budget following weeks of debate on lower oil prices and how to write in a landmark oil export deal reached last year between Baghdad and the northern Kurdistan region.

The budget is based on $56 a barrel of crude, lowered from $60 a barrel in earlier drafts. Despite lower projected revenues from oil sales, the budget projects a deficit of $20 billion compared with $40 billion in an earlier version.

The vote Thursday marked a step forward, as rival blocs in parliament agreed to push through a budget that is badly needed for fiscal planning as Iraq’s finances reel from a plunge in global oil prices and a costly military campaign against Islamic extremists.

Iraq didn’t pass a 2014 budget.

Since December, parliament meetings to approve the 2015 draft budget have been bogged down by debate, mostly over what oil price to base the budget on and how to account for exports from the semiautonomous Kurdistan region.

Prime Minister Haider al-Abadi has said this year’s budget would be an austerity budget, focusing on slashing the bloated public sector and freeing up funds for military spending as Iraqi forces battle Islamic State.

Parliament’s economy and investment committee had initially described the draft as “a budget of punishment for the Iraqi people.” Some committee members criticized the draft—which outlines revenue generation under an oil export deal struck in December between Baghdad and the Kurdistan Regional Government—unfairly benefits the Kurdistan region, “while the rest of Iraq suffers austerity.”

Sunnis in parliament, too, had threatened to boycott the vote because the draft budget didn’t include funding provisions for a national guard—a security force meant to empower Sunnis within the Shiite-led government as it fights Islamic State.

Opening the voting session, parliament speaker Salim al-Jabouri said all disagreements over the budget had been resolved. “Iraqis have been waiting for this for a long time,” Mr. Jabouri said.

—Ali A. Nabhan contributed to this article.

Write to Nour Malas at nour.malas@wsj.com

Hi Richard,

I would say that it finished on support, so it is at a critical point. It did breach it intra- day though, which weakens it. Difficult to say what might happen but we have the 42.25 low below us plus I had 34p on the weekly I think (see an earlier post).

You are correct about volume - 6MM is too low to suggest a bottom has been reached but often with GKP the volume comes on the rise, not the fall. 6MM does suggest that some see this level as a buy though as it is well above the recent average.

If in doubt, sit out is my maxim.

F4T

Hi F4T

What are your latest thoughts? Finished below the long term support and volume still nothing special at 6m.

Do you think 30s are looking more likely?

Cheers

You da' man F4T!

Thank you again for your thoughts F4T

Quick update on the daily:
The test and then break of the important 61.6% fib let to it becoming strong resistance for a week. We then had a decisive break of the short term support at 53.50 to give all but a complete 100% retracement. Lovely double backtest on the short term RSI line.

Will 48.50 hold? No, not now we have a close below 50. My view is still that we will see at least 45.25, being the long term support.

Let's see if we get some kind of operational update now that we are below 50

GL
F4T