An Economist: Optimism About Oil Prices Is Inopportune

Baghdad The specialist in economic affairs, Durgham Muhammad Ali, confirmed: “The optimism of some analysts about the continued rise in oil prices, towards a price exceeding 150 dollars, is inopportune.”

He said in a statement to the National Iraqi News Agency / NINA / that “the policy of balancing between supply and demand will tilt in favor of supply after the increase in production, which will enter into effect after a period of time under pressure from oil-consuming countries.”

Muhammad Ali explained: “The current oil prices are low compared to the prices before 2014, when they exceeded 140 dollars per barrel,” noting: “the claiming of the current oil prices by oil-consuming countries as high, is an attempt to push the (OPEC +) countries to increase production and reduce prices. “

He pointed out: “The producing countries have not, so far, compensated for the losses of the Coronavirus pandemic, which plunged prices to record levels, and that they are hampered by loans and a decline in cash reserves that need to be repaid and treated by taking advantage of the relative growth of these prices.”

The economist continued: “The global economic growth rates will decline if the price of a barrel exceeds $100, which will reduce the demand for oil again, meaning that the chances of permanent growth in oil prices are a difficult hypothesis to achieve.”

He called on the preparers of the 2022 budget to take into account the adoption of balanced oil prices in the next budget.

Source: National Iraqi News Agency