WTI $42.87 +$1.12, Brent $46.12 +$1.29, Diff $3.25 +17c, NG $2.20 -1c
Oil price
Volatility remains the watchword even before the events that I have been talking about although the jockeying for position ahead of the Opec meeting is always worth watching. Yesterday's chatter was all about a deal that might have been done between Saudi Arabia and Iran, not normally comfortable bedfellows. Apparently as part of the Saudi ‘market stability’ policy they have cut a deal to absorb the slack when sanctions are lifted next year, I’ll believe that when I see it…
Of course the other part of the volatility is geopolitical and it doesnt get much more serious than a NATO member country shooting down a Russian jet then firing at the ejecting pilots. This is the watchword at the moment and despite the huge overhang of oil stocks the spikes may be worth watching, even trading. On trading of course we know that the hedgies have a huge overhanging short of crude oil, well they do know everything don't they…?
Finally the API inventory stats were worse than expected but not a catastrophe, at +2.6m barrels they were higher than the whisper which was 1.1m barrels and we shall look at stocks again after tonight’s EIA numbers.
IGas Energy
Interims from IGas this morning and all seems to be continuing as planned despite the financials being obviously hit by the oil price. Government support is strong as shale is given national priority status and planning should be getting easier and quicker but one feels it will still be slower than hoped for. Having said that a number of projects are under way and in the period the company did a farm-out with INEOS worth £30m, received 6 new licences in the 14th onshore round with hopefully more to come in the 2nd tranche later this year. I will add more after I have spoken to Steve Bowler, but at the moment progress is, if a little slower than wished for, at least tangible.
Bowleven
The company has announced that the Moambe well has achieved maximum stabilised flow rates of 7.3 mmscfd and is now in an extended test period. The plan is for it to produce at 4-5 mmscfd in the long haul. Now it’s time for the Zingana extended well test where plans are progressing and this will mean that the company can progress with gas sales discussions. I…
