WTI $45.41 -$3.79, Brent $49.56 -$4.59, Diff $4.15 -80c, NG $2.70 +1c
Oil price
After a rise of nearly 30% it was inevitable that the oil price would come off and the data available was all a bit negative. The Chinese number was already in the price yesterday but the US data was also not up to best expectations. The US numbers that the oil market does look at though, especially at times of season change are those of stock movements and the last thing they wanted to see last night was an API stock build of 7.6m barrels. All those smart kids in Wall Street had pencilled in a draw of 1.5m barrels and although there was a small draw at Cushing it was too little too late and by that I meant that the numbers come out at the close which is why oil is off another dollar this morning. Tonight’s EIA stats will be crucial ahead of the Bank Holiday weekend in the US. Still, we are over five bucks up on this time last week so mustn’t really complain. Finally Venezuela is all over the place at the moment, agreeing to talks with Russia about cooperation and last night popping up in Beijing accepting a modest $5bn loan from China to help develop more oil production, that’s all we need….
Velocys
After all the furore at Velocys in recent months it is nice to be able to report that significant progress is being made. The company announce today that manufacture of full-scale commercial Fischer-Tropsch reactors for ENVIA Energy’s Oklahoma City GTL project is complete. The catalyst ticks all the appropriate boxes in terms of certifications and performance criteria and fabrication of modular process units is continuing with mechanical completion of the plant expected in 1H 2016. I remain confident that Velocys is in good shape and hopefully will before long regain the confidence of the market.
Empyrean Energy
I met with Tom Kelly recently and starting coverage was pretty positive, the shares rallied after my write-up but then fell sharply in line with the oil price. Today the company has announced a very positive update on reserves which appears to have, how you say, been second guessed by the marché…Certainly the upgrade of 1P reserves of 63% and of 2P of 94% is not to be sneezed at and these numbers don't…
