WTI $59.69 -19c, Brent $66.57 -2c, Diff $6.88 +17c, NG $3.02 +1c

Oil price

As we start the lead-up to the Opec meeting on June 5th the usual pre-meeting stories are doing the rounds as one might expect. On Friday the Venezuelan President announced that 'some sort of deal is being worked on' which is probably fair enough as it would be foolish of the 'have nots' not to have a plan B of some sort. Now, normally I would suggest that this sort of story doing the rounds is as inevitable as it is unlikely to succeed but there is just a chance that something may be afoot. Last week in Houston gave me the chance to speak and listen to a number of senior industry figures and it does seem like there may be something to this particular story. I understand that behind the scenes the possibility exists, and it is only that, of an agreement to cut by a modest amount to be shared by Opec and non-Opec producers as an attempt to at least show willing in the oil market. I will be keeping an eye out for anything that suggests that this story has legs, as they say.

With another week in which the oil price only just managed to tread water and that was probably mainly due to the weakening dollar, it is worth bearing in mind that the fundamentals are hardly conducive to another bull run, at least not yet. The three agencies reports last week were mixed but hardly showed significant demand uplifts whilst supply remains solid. The state of the US economy is at best mixed, whilst employment figures remain steady, Friday's numbers on industrial production, consumer confidence and retail sales were not good and the dollar weakness is probably due to predictions of rate rises being pushed back. That greenback weakness is a small branch to be clung to. Add to that a fall of only 8 oil rigs in last week's count is showing an inevitable shallowing of the rate of decline is happening, a plus number is not far away.

Bahamas Petroleum

Could the sun be coming out in the Bahamas one wonders? Today's announcement of a Licence Renewal Addendum being signed is an 'unambiguous marker for future activity: to commence our first exploration well by April 2017, and a clear period of time in which to both secure a suitable farm-in partner…

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