WTI $52.78 +$1.13, Brent $58.61 +$1.56, Diff $5.83 +43c, NG $2.73 +4c
Oil price
Whilst the high levels of stocks around the world are definitely holding back the oil price at the moment I think that there are a few glimmers of optimism one can draw this morning. I am not clutching at straws but just picking up on a few vibes that may or may not come to fruition this weekend!
Firstly, it is beginning to look just possible that Greece may have done enough to get a deal with its lenders, the meeting on Sunday will decide it for once and for all but at the moment its a definite possibility as they say. There is an outside chance that an initial positive verdict could even come as early as today.
Secondly, in Vienna we are approaching D-day with the US saying that there was ‘no hurry’ to do a deal and even Barry himself said yesterday that the chances of success being ‘below 50:50?. After today it looks like being September 7th so oil markets would cheer failure.
Thirdly, there are some signs of the turmoil in China’s equity markets easing and whilst I don't believe that there is a natural link between financial markets and crude demand there is always some sort of knock-on effect on sentiment.
Finally I have been looking at the EIA numbers on gasoline demand in the US, where drivers are very much back on the roads. Automotive gasoline (mogas) demand is up 7.1% y/y and is at its highest level since 2010, up 480/- b/d y/y and up 250/- b/d on the 10 year seasonal average which is quite impressive. Get this one, US motorists drove 988 billion miles in the first 4 months of 2015 which is a stat I never tire of mentioning…With German and Japanese economic data also showing encouraging signs there are indeed a few green shoots or even straws to clutch at!
Petrofac
Petrofac has announced that they have won a contract from the Kuwait Oil Company worth $780m. This is a lump sum EPC contract for the KOC’s manifold group trunkline system in the north of the country. With the PFC price having dropped back down to below 900p I would suggest that they are good value again.
Savannah Petroleum
Crikey Batman, I only just started covering Savannah this week following a meeting with CEO Andrew Knott and already we have…
