WTI $60.30 +$2.62, Brent $65.56 +$2.98, Diff $5.26 +36c, NG $2.64 -6c

Oil price

Last week the oil price was weak mainly due to the dollar strength but it picked up sharply right at the end. A combination of inventory draw and the continued fall in the rig count, which was down 13 oil rigs at 646, gave bulls fresh impetus. Accordingly, WTI was up 58 cents on the week and 67 cents on the month while Brent recorded a rise of 19 cents and a fall of $1.22 respectively, hardly busting out all over. With a fall of nearly 250/- b/d from Canada due to the fires the local market is quite tight.

This week sees the Opec meeting on Friday and all the signs are that it will rollover the December agreement, maintaining the 30m b/d target. Obviously the ‘target’ has been missed by as much as a million barrels a day since then and will continue to be so but the Gulf states will hope that by the time of the December meeting demand will have risen and supply fallen. Certainly the outlook for 2016 looks considerably better and while US shale producers appear to be living with $60 WTI, capex cuts from the majors will take a lot of crude off the market starting next year.

And if you believe the EIA then the Saudis can afford the pain being created by market share gains. According to their numbers the Kingdom will lose $39bn in 2015 which is only 5% of the $733bn that is in their Sovereign Wealth Fund…

Gulf Keystone

So the market rumours that have placed Jón Ferrier at the helm of GKP are true and in the latest bout of management changes CEO John Gerstenlauer has been replaced. This means that the company has replaced the Chairman, two CEO’s and one CFO in recent times and this is the latest roll of the dice. I have a great deal of time and respect for John Gerstenlauer and I hope that he reappears before long, maybe after a well deserved break.

Mr Ferrier has what looks like an admirable CV with experience in many companies and indeed time in Kurdistan with Maersk. I have spoken to former colleagues who rate him very highly as an oilman and a ‘people person’ and if he lacks anything it will be a shortage of market experience, with the amount of noise…

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