WTI $42.56 +$3.96, Brent $47.56 +$4.42, Diff $5.00 +46c, NG $2.64 -6c

Oil price

Wow, that was one hell of a week whichever way you look at it. The oil price has picked up from the bottom in no mean fashion, yesterday's rise was the biggest one day rally in six years and WTI will likely be up on the week for the first time in 11. There are a number of reasons for the rally with fundamentals not really being involved that much. True, the inventory stats helped a fair bit as did the US crude production falling to 9.34m b/d day and the US GDP revision was a bit higher than expected at 3.7%.

It was worries about China that started some stories about Opec ‘reexamining’ their stance and more countries called for an emergency meeting, maybe with non-Opec participation. When WTI dipped into the 30’s even the Saudis were apparently taking the notion seriously and today it’s Venezuela calling for a meeting with Russia invited along. Those of you who watched my interview on IGTV on Wednesday or through the link in the blog yesterday will understand what I was trying to get over, no great change in fundamentals but some change in how to deal with the problem right now. I have had many requests to see it again so the link is below, it is also on the website at www.malcysblog.com

https://www.ig.com/au/live-video?bctid=44450692650...

Unsurprisingly all of the above led to a proper bout of short covering, with net long positions at a low and shorts having trebled in a month it was like putting petrol on a fire and the rally was significant. Early this morning crude made further gains of nearly another dollar but as I write prices are a touch below last nights close, next bull point is Tropical Storm Erika hurtling through the Caribbean…

Independent Oil & Gas

Barely a week goes by without IOG touching base with regards to their finances, today they are updating on money, licences and the Alpha sale and purchase agreement. Right now it seems that the company is pursuing a contractor-led funding approach in order to drill the appraisal well on Skipper late this year. To do this the company has had to discuss matters with the OGA which has resulted in that licence being extended until 31/12/2015, in addition the Blythe licence has been extended until 31/12/2016…

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