WTI $65.70 +$1.70, Brent $74.04 +$2.07, Diff -$8.34 +48c, NG $2.52 +3c
It was a rather favourable combination of factors but for whatever reason the oil price has climbed back towards the $75 level and shows no sign of coming back any time soon. Firstly Washington has proved that its hate for Iran is way stronger than its worry about higher crude prices as it has canceled all 8 remaining waivers with a deadline of midnight on Mayday. Some will complain and India and China have the most clout but right now the plan is to zero the Iranian exports if at all possible, the ultimate irony is that the USA has cut a deal with leading Opec producers to make up any shortfall.
Add to that the JODI data that showed Saudi production below 7m b/d and you have the technical wherewithal for a mighty squeeze, and if you remember that traders were reporting last week that there was a deal of profit taking ahead of the holiday weekend then in thin global markets yesterday they too came back in to reinstate their long positions. With the rig count falling, overall down 10 at 1,012 and in oil down 8 at 825 the market needed no further encouragement to kick on.
Company news from the US has been of interest over the weekend. ConocoPhillips has announced that it has sold its UK North Sea assets to Chrysaor for $2.7bn so Ineos and Premier will have to look elsewhere…Exxon has announced yet another discovery offshore Guyana with its Yellowtail-1 well coming in and adding to the 5.5bn estimated recoverable resources on the Stabroek block…And the Halliburton figures yesterday where well received by the market, the company beat expectations particularly on the US and it states that prices are bottoming out and the outlook has improved, maybe a nudge for Hunting with its Titan business flying…
Falcon Oil & Gas
Falcon has extended the option to acquire its 30% of the ORRI held by TOG until 31st August 2021 at a cost of $5m and an increase of $3m to $7.5m for the deal. This is due to the recent moratorium which has delayed the progress of the project and this allows FOG to make a better informed decision. I have no doubt in my mind that this is good news for FOG, housekeeping admittedly but a further snippet of good news for the longer term.
UPL has announced that it has received ‘several unsolicited approaches’ from people wishing to farm-in to its Saouaf licence onshore Tunisia. The company is progressing these expressions of interest and see it as a validation of the potential of their new asset. It also seems that state company ETAP has also asked UPL to look at farming-in to a number of specifically producing fields for ‘mutual benefit’ which is good on many levels.
Elsewhere the company says that good progress is being made in Sarawak and that also it has lodged a bid for acreage in the recent UK Government’s 31st licencing round in the North Sea. News from Upland is a significant rarity and it seems like an age ago that I sat down with excellent CEO Dr Steve Staley who is a wise and experienced industry veteran. With Tunisia looking highly promising and the company getting over the huge Wick disappointment the shares have rallied from the lows and remain a highly prospective, if long term play in the sector.
Last Thursday I sat down with Doc Holiday of Total Market Solutions for a chat about all things oily. We talked about the oil price and a whole bunch of companies some which have exceeded expectations,, others disappointed.
With both Liverpool and the Noisy Neighbours winning at the weekend the title seems to be going to the wire although tomorrow night’s Manchester derby is now in the easier category after the Red Devils embarrassing capitulation to the Toffees on Sunday. With Chelski drawing and Spurs, the Gooners and Man U losing, the remaining Champions League spaces are hardly being fought over…