WTI $67.38 +50c, Brent $69.92 -62c, Diff $2.54 -$1.12, NG $3.81 -7c
The differential between Brent and WTI narrowed yesterday as economic data from the USA was generally better than expected. Added to that, the EIA inventory stats showed a draw of 3.7m barrels of crude oil against forecasts of a build and WTI outperformed as US refiners utilisation increased by 1.9%. The EIA also announced that US production had reached an all time high of 9.083m b/d which wont have surprised anyone after the recent Opec meeting.
Whilst on the subject of Opec, it is widely reported that the Saudis feel that oil prices could stabilise at around $60, interestingly the 200 day moving average price is $60.34… The next stop on the charts on the way down after that is $41.37 so I hope they are right. Certainly, whilst following recent short covering the oil price has stayed at around $70 there is no reason to believe that it wont fall further, there will be some bad days in the next few months, exemplified by the US domestic production going over 9m b/d. Saudi Arabia has announced this morning that it has cut prices for clients in the US and Asia for January liftings.
If you can catch the interview Rex Tillerson did with CNBC it is worth a look, as you would expect from him it is a frank and open discussion of the current situation. He maintains his long term view on life and suggests that a lot of his portfolio is profitable at $40 oil and that he will look at the inevitable opportunities as there will be ‘some sorting out’ after the recent weakness.
Egdon has announced this morning that the Environment Agency issued a permit on December 1st for Wressle-1 and subject to the group submitting methodology this week the testing well will mobilise in the first week of January. The well will test the hydrocarbons discovered in three main intervals for type and potential flow rates and of course for commerciality. This should be a material result for all participants all of whom have plenty of other interesting prospects coming up in 2015.
Word on the street is that Santos have pulled a debt issue in Europe this week, its not a market I am overly conversant with but doesn’t come as a great surprise.
And for holders of Andes Energia some fairly bullish comments from YPF about the Vaca Muerta, apparently it is ‘not at all at risk at these prices’.
For those waiting for the Bowleven piece, apologies for the delay, it should be in tomorrow, almost done but got held up this morning…
England did finally beat Sri Lanka after recalling Hales, having said that it was Root and Buttler who delivered yesterday, with Captain Cook banned for one match who will come in for him, surely Taylor cant continue to be overlooked?
More key matches in the Prem last night as the Gooners left it late to beat the Saints, elsewhere Chelski thumped Spurs, the Toffees drew 1-1 with the Tigers and the Maccams couldnt keep up Saturday’s form and went down 1-4 to the Noisy Neighbours.
And in the snooker, Neil Robertson the current title holder went out to Graeme Dott who rolled back the years.