WTI $50.09 +$2.49, Brent $57.10 +$1.99, Diff $7.01 -50c, NG $2.60 -4c

Oil price

The inevitable rally in the oil price as the chances of a deal with Iran on the nuclear front starts to recede. Although John Kerry and his team are apparently staying in Lausanne until tonight the market has assumed that a deal is not now imminent. This may be premature as I understand that all is not lost but it may just revert back to the framework option that can be firmed up with a June deadline reset.

Looking back at the quarter, oil prices fell again but not quite as sharply as last year. WTI was the worst performer falling 11.9% as stocks, imports and domestic production all rose and with no export route for crude oil the USA became an island awash with oil. As for Brent it had a better ride and was only down 4% in the period but it would have been worse but for the rally last week associated with the Saudi military action in Yemen.

Last night the EIA inventory data showed yet another rise in stocks with a build of 4.8m barrels of crude oil, slightly higher than the whisper. Its worth taking a look at the gasoline stock situation as that showed a draw of 4.3m barrels as product exports rose sharply and thanks to the economy, demand rose by 800/- b/d taking US consumption up to 9.4m b/d…The EIA also announced that US domestic production fell for the first time in a while but dont get too excited it was only down to 9.34m b/d!

Yesterday I spent some time with Jeremy Naylor at IG Group where he interviewed me for IG TV, it was a wide ranging and very general discussion about the oil and gas sector covering some of the basics as requested by his audience as well as talking about Opec and even Arctic drilling, it can be seen on the blog website www.malcysblog.com or on this link :

http://www.ig.com/uk/market-insight-videos?bctid=4147203830001&bclid=3671160850001

Falklands drilling- Premier-Rockhopper-FOGL

So, the first well in the latest campaign in the Falklands has been a success with the drilling on 14/15b-5 finding both oil and gas. In the Hector sands there was 18.5m of net gas pay from a gross reservoir package of 27.6m found at the crest of the structure, initial indications are of good reservoir properties. In addition it…

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