WTI $90.73 -43c, Brent $94.16 -51c, Diff $3.43 -8c, NG $4.02 -10c

Oil price

There is a soggy tone to oil prices at the moment as news is filtering into the market that Saudi Arabia has set November prices to Far East buyers for November liftings at what might be significant discounts to current levels. These price points are a good signal as to what the Saudis are doing, if they were considering cutting back on production their normal policy would be to raise prices thus discouraging buyers, this action, if it is true is a solid signal that they are not, at least at the moment, going to be the swing producer. Also remember that with the Opec meeting at the end of November this is clearly designed to concentrate some minds and remind the market who is the boss.

EIA inventory stocks came in at a draw of 1.4m barrels which after the build in the API numbers was not such a surprise, it wasn’t enough to rally WTI much though.

Ophir Energy

Another gas discovery in Tanzania from Ophir this morning, the Kamba-1 well and its side-track found 18 metres then 140 metres of gas pay in the Fulusi prospect. The company say that this is a cumulative 1.03 TCF and so in block 4 they have enough for 1 train of LNG and in blocks 1 and 4 together enough for 3 trains.

Primeline Energy

Primeline is a stock that blog readers will remember me covering before, they were a client in a previous life and it is a very interesting story. Primeline is one of the few ways to play the China offshore gas story in E&P and you will remember that the market was waiting for final permissions, which were received and first gas which flowed in July. I met up recently with the new CFO of Primeline, Stuart Joyner whom I have known for a long time, most recently as CFO at Sound Oil but for many years in energy investment banking. Primeline is TSX listed and I understand that the company is on the road both here and in North America in coming months to tell the story again.

Primeline is a big challenge for Stuart but at the moment the shares do again look very good value having been impacted lately by the political problems in Hong Kong as well as concerns over the economic slowdown in China itself. The upside for the stock is in the LS 36-1 project which should soon be throwing off cash as well as the exploration upside, always the exciting part, I expect a two well drilling programme in the next 12 months. Watch this space…

Dan Yergin

I occasionally mention Dan in my blog as he was a very important mentor to me and others along with his partners at CERA way back in the 80’s. I would therefore like to congratulate him on receiving from the US Administration its first ever medal recognising his contribution to energy security.

And finally… 

A cracking performance by the Gooners yesterday beating Galatasaray 4-1 and I have to say that Welbeck did indeed appear to be on fire… The Hubcap Stealers found it hard going in Basel though and went down 1-0. Good thing next two matches are Real home and away…