WTI $52.33 -20c, Brent $56.85 +31c, Diff $4.52 +51c, NG $2.72 -4c
Oil price
If yesterday's short blog had gone to everyone as intended it would have read not much differently regarding the oil price as today, except of course after the events in Greece at the weekend causing the sharp price fall. All the factors are still in place this morning and it’s all about deadlines. Greece has until tomorrow night to present its case to its lenders after which the full EU will meet to decide on Sunday, Grexit we are told, is very much on the agenda.
The next deadline, or should I say last deadline is for the talks in Vienna on the Iranian nuclear situation which were scheduled to complete yesterday. I mentioned previously that these talks were more than 50:50 to provide an agreement but this has to be before Friday which is the 30 day review deadline for the US Congress, after that it reverts to September 7th so expect something one way or another in the next 48 hours.
Apart from that the oil price remains consistently tied into the US dollar, again as I have said before, if you have a strong view of the greenback you are likely quids in, as it were, take a look at the chart its compelling…
Today is budget day in the UK with Chancellor Osborne presenting a Conservative Bill for the first time since 1996.
I will comment further on the EIA STEO another time but the key takeaways are that their Brent forecasts are for $60 in 2015 and $67 in 2016, they expect a gradual but continued fall in US production through ‘early 2016? before seeing a resumption in growth.
Savannah Petroleum
I spent some time yesterday with Andrew Knott, CEO of Savannah and in the next few days will write up my conclusions, broadly they are pretty positive but this is one you need patience with although the rewards do seem tangible. In the meantime though they have announced this morning an update by independent experts CGG on their resource volumes on their R1 and R2 blocks in Niger. The numbers appear compelling with an increase of gross risked prospective oil resources from 573m barrels to 1,191m, for the 14 3D seismic prospects CGG have given them 259m barrels against the company’s estimate of 215m.
As I said, I will write more later in the week but Savannah…
