WTI $54.98 -$1.95, Brent $59.76 -56c, Diff $4.78 -36c, NG $2.75 -3c

Oil price

With the US closed on Friday the prices above are the opening ones from London this morning, markets are naturally cautious and have continued the fall from the end of the week. WTI fell 6.91% and Brent was down 4.65% on the week, a number that might have been worse one suspects. A combination of higher stocks, an increase in the oil rig count and a potential deal with Iran not surprisingly kept the market subdued not to mention Greece.

The situation in Greece probably has more of a currency effect on the oil market and traders will be watching the dollar closely into the bargain but rate rises in the US appear to be being talked down a touch in recent days.

Probably of more significance is the likelihood of a deal with Iran in the nuclear talks. The next technical deadline is tomorrow but John Kerry has said that it may be this week and that there is ‘every chance of success if all parties pull together’. The real key date is Friday as the 10th is the 30 day review deadline day for the US Congress, if it misses this we are talking September 7th so expect something either way this week.

The elusive KRG bond issue is still being talked around but bond guru Marcus Ashworth tells me he hasn’t seen any signs of a raise in what must be a difficult and very specialised market. In Brazil it looks like Congress there will pass a bill allowing other companies than Petrobras to be operators of offshore fields, a move that the likes of Shell will welcome.

Ophir Energy

Ophir has announced its pre-close trading update with first half production of 14,600 boe/d in line with guidance, as will the full year be. The Fortuna FLNG  is progressing according to plans with costs down and first gas sooner than expected and there will be at least two exploration wells in Thailand in the second half of this year. In addition to this the company is achieving $60m p.a. of cost savings and have a strong cash position with $405m in the bank and an intention to review the debt position in the second half. Ophir enjoys its ‘flexibility’ and appears to have cut back on a lot of drilling activity recently, but it’s difficult to comment further…

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