WTI $50.51 -74c, Brent $56.65 -45c, Diff $6.50 -33c, NG $2.82 -5c

Oil price

More drift yesterday as the strong dollar and weakness in the product market left the oil price under modest pressure, the UN Security council and the EU Foreign Ministers nodded through the Iran deal which now goes to Congress for 60 days. With WTI expiring today traders told me that the market was quiet but in no mood to fall significantly. Maybe this is because digestion of the JODI report continues and it did show that 2Q global oil demand was still pretty strong, perhaps this is why refiners are still pedal to the metal and at 95%+ rates are filling the product pipeline every day, it can't go on indefinitely. Also as per my comments yesterday it seems that the diesel buyers at WM Morrison have had some excess stock from Saudi Arabia who are also filling in demand for diesel distillates.

One thing worth taking a look at is the Boeing 20 year outlook, which although written taking somewhat heroic assumptions does make you think that unless a replacement for fossil fuel can be found something has to break. The company say that due to growing demand for air travel 558/- new pilots and 609/- new engineers will be needed over the next 20 years. With the purchase (they hope) of 38/- new passenger jets costing $5.6tn the current fleet size will double. I recently wrote of 100 new airports being built in China where the travel bug has properly been bitten and in India the travel industry is gearing up as well. Doesn’t sound too bearish to me…

Halliburton

Halliburton also cruised past what was admittedly a fairly soft whisper of 29c coming in with 44c. Business activity outpaced the declining market by utilising their market presence and having strong cost efficiencies. Dave Lesar suggested that there was a ‘customer flight to quality’ and that pricing ‘dalliances’ were decelerating whatever that means. He is expecting a ‘meaningful’ pick up in activity in 2016 and that a modest uptick is possible in the 2nd half of this year. Watch out for Baker Hughes numbers later today.

Egdon/Europa/Celtique/Union Jack

The Wressle-1 EWT has produced its first results and whilst operations were not entirely predictable it is a good result under the circumstances. The Ashover Grit oil reservoir was not undertaken due to problems with…

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