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Iraq Signs Deal with BP to Develop Kirkuk Oil and Gas Fields

This handout picture released by Iraq's Prime Minister's Media Office on August 1, 2024, shows him (C) looking on as BP CEO, Murray Auchincloss, (L) and Iraq's Minister of Oil, Hayan Abdul Ghani al-Sawad, sign a memorandum of understanding to develop four oil fields in Kirkuk. (Photo by IRAQI PRIME MINISTER'S PRESS OFFICE / AFP)
This handout picture released by Iraq's Prime Minister's Media Office on August 1, 2024, shows him (C) looking on as BP CEO, Murray Auchincloss, (L) and Iraq's Minister of Oil, Hayan Abdul Ghani al-Sawad, sign a memorandum of understanding to develop four oil fields in Kirkuk. (Photo by IRAQI PRIME MINISTER'S PRESS OFFICE / AFP)
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Iraq Signs Deal with BP to Develop Kirkuk Oil and Gas Fields

This handout picture released by Iraq's Prime Minister's Media Office on August 1, 2024, shows him (C) looking on as BP CEO, Murray Auchincloss, (L) and Iraq's Minister of Oil, Hayan Abdul Ghani al-Sawad, sign a memorandum of understanding to develop four oil fields in Kirkuk. (Photo by IRAQI PRIME MINISTER'S PRESS OFFICE / AFP)
This handout picture released by Iraq's Prime Minister's Media Office on August 1, 2024, shows him (C) looking on as BP CEO, Murray Auchincloss, (L) and Iraq's Minister of Oil, Hayan Abdul Ghani al-Sawad, sign a memorandum of understanding to develop four oil fields in Kirkuk. (Photo by IRAQI PRIME MINISTER'S PRESS OFFICE / AFP)

Iraq has signed a preliminary agreement with British energy group BP to develop the northern Kirkuk oil and gas fields, the Iraqi prime minister's office said on Thursday.
Under the deal, which was signed in Baghdad between Iraq's oil minister Hayan Abdel-Ghani and BP CEO Murray Auchincloss, BP will develop four oil and fields in the Kirkuk region, the statement from the Iraqi prime minister's office said.
BP will start drawing up a major plan to boost output capacity of crude oil and gas from Kirkuk, Bai Hasan, Jambour and Khabbaz fields, Iraq oil ministry officials said.
The Kirkuk field's reservoir was discovered in 1927 and is where Iraq's oil industry was founded, reported Reuters.
Iraq, the second biggest producer in the Organization of the Petroleum Exporting Countries behind Saudi Arabia, currently has the capacity to produce almost 5 million barrels per day.

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Euro Zone Inflation Edges up in 'Difficult Print' for ECB

A general view of a fruit and vegetable stand on a weekly market in Berlin, Germany, March 14, 2020. REUTERS/Annegret Hilse/File Photo Purchase Licensing Rights
A general view of a fruit and vegetable stand on a weekly market in Berlin, Germany, March 14, 2020. REUTERS/Annegret Hilse/File Photo Purchase Licensing Rights
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Euro Zone Inflation Edges up in 'Difficult Print' for ECB

A general view of a fruit and vegetable stand on a weekly market in Berlin, Germany, March 14, 2020. REUTERS/Annegret Hilse/File Photo Purchase Licensing Rights
A general view of a fruit and vegetable stand on a weekly market in Berlin, Germany, March 14, 2020. REUTERS/Annegret Hilse/File Photo Purchase Licensing Rights

Euro zone inflation unexpectedly edged up in July, data showed on Wednesday, although a widely watched gauge of price growth in the services sector eased.

Wednesday's figures did not seem to derail market expectations for an interest rate cut by the European Central Bank in September, but they were likely to strengthen concerns about a difficult last mile in the ECB's efforts to bring down inflation.

According to Reuters, price growth in the 20 countries that share the euro accelerated to 2.6% in July from 2.5% in June according to Eurostat's flash estimate.

A key measure of underlying growth in prices -- which excludes energy, food, alcohol and tobacco -- failed to show the expected decline and came in unchanged at 2.9%.

"It's a difficult print for the ECB," said Fabio Balboni, an economist at HSBC. "Disinflation on the goods side is coming to an end and services inflation remains high."

Still, Balboni stuck to his call for ECB cuts in September and December, as did investors in euro zone money markets, on expectations that inflation would eventually ease.

A general view of a fruit and vegetable stand on a weekly market in Berlin, Germany, March 14, 2020. REUTERS/Annegret Hilse/File Photo Purchase Licensing Rights.

"I still expect a second rate cut to come in September," said Kyle Chapman, a foreign exchange markets analyst at Ballinger Group. "I don’t think it matters too much if we get the odd data point that’s slightly stronger than expected."

Euro zone inflation has fallen a long way since briefly hitting double digits in late 2022, when it had been boosted in large part by a brisker-than-expected reopening of the economy after the COVID-19 pandemic and more expensive fuel in the wake of Russia's invasion of Ukraine.

But that progress has stalled in recent months as prices in the services sector got a boost from higher salaries.

In a small, positive sign for the ECB, services' price growth eased to 4.0% from 4.1% in June as an expected boost from the Olympics in Paris failed to materialise, with some consumers balking at what they saw as price-gouging.

"This kind of pushback bodes well for the medium term inflation outlook," economists at ABN-Amro wrote in a note.

The ECB has made clear it would not be swayed by individual data points and will focus instead on the broader trend for inflation, which it expects to bounce around current levels this year before pulling back towards its 2% target in 2025.

The central bank started cutting rates last month, paused in July and is widely expected to slowly dial back over the next 1-1/2 years some of the steepest hikes it has made in its 25-year history.