WTI $44.60 -78c, Brent $47.99 -9c, Diff $3.39 +65c, NG $2.29 -10c
Oil price
Last week both WTI and Brent lost around $2.50 with crude stocks increasing and products holding their own. The strength of the greenback in the last day or two hasn’t helped and the rate cut in China didn't help commodity markets much. The rig count was very modest, unchanged overall and minus one in oil is hardly going to light any fires, although evidence appears to be showing more falls. Net speculative length positions fell again last week by 13,841 contracts indicating little optimism from the hedgies. It is worth noting that NG fell sharply again on Friday and is heading back to $2.
I said last week that the end of October is an important time in the US market, refinery maintenance should be complete and they will be prepared for the first of the cold weather and sales of heating oil. If that is correct then maybe, just maybe, we might see a modest pick up in demand and perhaps a stock build before long. Certainly it is worth looking at the offline capacity numbers which have fallen by a million barrels since the beginning of the month to the end of last week.
Trinity Exploration & Production
It's been a busy week for Trinity what with the sale of its onshore interests to Touchstone and now the reorganisation of the board. The market heaved a huge sigh of relief with the sale, there had been so many extensions of the debt that the market was fearing the worst, as it was the shares doubled on the news. Today the company announce that Monty Pemberton has resigned as CEO with effect from the end of this year and that Bruce Dingwall will return as Executive Chairman. As the ‘forward focus’ is to be on the company’s offshore acreage and a further serious cutting of costs can be expected much is to be done, but my optimism, though tempered, may be reinstated. I look forward to catching up with Bruce again in the not too distant future.
Europa Oil & Gas
There have been plenty of announcements from EOG lately on both the UK onshore and Irish offshore assets. Today sees the announcement of the updated independent assessment of assets by ERCE following the departure of Kosmos. The assessment has been made as I can see it with…
