WTI $45.20 -$1.09, Brent $47.85 -86c, Diff $2.65 -51c, NG $2.40 -7c
Oil price
Oil traded back to the bottom of its recent range yesterday as the EIA inventory stats disappointed the market. Expecting 3.7m barrels and having seen the API come in with 7.1m the actual of +8m barrels was poor. Crude stocks are still 26% ahead of this time last year and 23% above average… Refinery utilisation rates fell again, down to 86.4% but it could have been worse as product stocks drew and the EIA in its report suggested that 3Q gasoline demand would be a healthy 9.3m b/d.
The Opec ‘technical’ meeting was, unsurprisingly, a waste of everybody’s time with output cuts not making it on to the agenda as they discussed long term investment policy. Not to be put off by this, Venezuela immediately called for a ‘Heads of States from Opec and other producing nations’ Summit to be held in November ahead of the Dec 4th Opec meeting, we shall see…
BP
Beep’s did get the CNPC deal that we had all expected although not quite in the format that many had predicted. There will be a framework agreement, always good to have, including ‘strategic cooperation’ including shale gas exploration and production in the Sichuan Basin. Also there will be deals on fuel retailing in China as well as other international partnerships including selling 1m tons of LNG pa worth $10bn according to BP.
Sound Energy
News coming thick and fast from Sound, today it is confirmation that the Heads of Terms has been signed in respect of Sidi Moktar, onshore Morocco. As previously announced this is an existing gas discovery with exploration potential and continues Sound’s Mediterranean expansion. Combined with yesterday’s Schlumberger deal the management at Sound are certainly not letting the grass grow under their feet.
Falcon Oil & Gas
Really good news this morning from Falcon where they announce a cracking gas discovery on Amungee NW-1.This is confirmation of the Middle Velkerri formation east of the first well, falling in a highly prospective gas mature depth window. There appears to be plenty of pay and serious gas shows mean that, much more importantly, the partners (Origin and Sasol) are bringing forward the drilling of the first horizontal well by a full year. Falcon are still carried on this and as CEO Philip O’Quigley states ‘is a massive endorsement of the potential prospectivity of our …
