Iraq expects 2015 budget based on $80 per barrel oil price

Iraq’s budget breakeven point for 2014 is above $100 a barrel according to the IMF

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OPEC producer Iraq expects to base its 2015 budget on an oil price of $80 per barrel, Oil Minister Adel Abdel Mehdi told parliament on Monday.

Oil prices have fallen to below $80 on abundant and weak demand from $115 a barrel in June. Skepticism that OPEC will cut supply when it meets on Nov. 27 have also weighed on the prices.

Iraq’s budget breakeven point for 2014 is above $100 a barrel according to the IMF, but Abdel Mehdi suggested production levels might rise next year.

He said government forecast southern Iraq output of 2.75 million barrels per day. “If Kurdistan and Kirkuk oil will enter, it is possible we reach numbers that will exceed the number (the) 2014 budget of 3.4 million barrels.”

The government was not able to present a 2014 budget to parliament but has pledged to detail spending at a later date. Finance Minister Hoshiyar Zebari said this month that the government had promised to set out a proper budget for 2015.

Venezuela, Ecuador and a Libyan OPEC official have called for OPEC to cut output, and so far only Kuwait and Iran have said a reduction is unlikely at the OPEC meeting.

Privately some OPEC delegates are talking of the need for some action, although they warn an agreement will not be easy to reach.

Iraq did not publicly comment on whether OPEC would need to cut output but it has said in the past it should be exempt from any official cuts by OPEC as it is struggling to build its economy after years of violence and war.

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