WTI $44.43 -$1.27, Brent $47.34 -$1.26, Diff $2.91 +1c, NG $2.56 n/c

Oil price

The oil price headed back downwards yesterday and with equity markets reacting badly to a number of economic stats that has carried over into Asia and Europe this morning. There must be some sort of ‘Glencore’ effect in the commodity markets and of course a number of the international traders have substantial oil and gas assets in their own rights which may cause some peripheral concern.

Adding to the slight worries about the oil glut the Russian Deputy oil Minister said yesterday that he expected production this year to be slightly up at around 10.56m b/d, no signs of a policy change there at the moment. The only slight plus was the Genscape inventory number which put the stocks at Cushing down by 1m barrels which would help if only modestly, tonight is API time and we will need to see another draw from them.

Gulf Keystone Petroleum

I was recently fortunate to spend some time with Jón Ferrier who has recently become CEO of GKP, indeed given my 100 days in office fixation I immediately discovered that our chat was indeed on day 101 in office. I had done a bit of homework on Mr Ferrier and had very positive feedback from industry executives who praised him as a hands-on operationally hard-working type, probably what is needed at GKP right now. Indeed having spent some time working with Petro Canada in Syria, Ferrier has experience in tough conditions and old friends in the country, although when he sees me reading the Daily Telegraph interview he is less than amused by the inset picture of what looks like President Assad waving him off.

The last few years have been tough for all the companies working in Kurdistan which have been well documented but I would say that operationally and under such conditions all have performed well if not highly creditably. Recent reports from the company have shown record production, some days of nearly 50/- b/d have been reported so the wells are delivering the goods as are the production facilities. Shaikan is performing well with good connectivity and pretty much only restrained by infrastructure, the pipeline will have plenty of capacity and there are no water problems at present. Whether it is by truck to Dortyol or pipeline to Fyshkabour and then Ceyhan on the Mediterranean coast where the netbacks…

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