WTI $36.76 -40c, Brent $39.73 -38c, Diff $2.97 +2c, NG $2.02 -5c
We end the week at new lows and more than four dollars easier than on Opec day last Friday. This comes as no surprise as the decision, or non-decision in Vienna leaves the market with no place to go, at least for the foreseeable future. The Opec numbers yesterday were a bit mixed to say the least, November output was 31.695m b/d, a three year high with Iraq adding a quarter of a million barrels to produce 4.3m b/d. With Non-Opec falling more slowly than expected the only good news is that global demand is higher than forecast, up 1.53m b/d to 92.88m and the call on Opec next year will be 30.8m b/d. Now, with Opec producing more than that now and without the addition of potential supply from Iran even the most optimistic of market followers will realise that something has to change if further misery is to be avoided. Ironically gasoline rose yesterday as rumours spread that BP had closed its Whiting refinery on Wednesday night.
I gave an interview to Jeremy Naylor at IGTV on Wednesday to discuss the Opec meeting and the big picture, the link is on www.malcysblog.com and below.
Both the above companies held analyst calls following their announcement of 2016 Capex numbers. Chevron will spend $26.6bn, down 24% and Conoco $7.7bn, down 25% which show some consistency. Both companies state that the dividend is sacrosanct and Mr Watson at Chevron thinks that the oil price will rise next year….
Independent Oil & Gas
It seems like IOG have an announcement every day at the moment, today they revealed a further loan from London Group of £800,000 at 9% with 7.5m warrants at 8p. Given that there has been some misinformation around about all this I decided to pick up the phone and speak to Mark and Peter. The overriding feeling at the company is that it is quite an achievement to raise loan funding to drill an appraisal well in this market, with which I concur. With only a few hurdles to cross it looks likely that the Skipper well will spud early next year so by March at the latest we should know whats down there.
Clearly the historic evidence is heavy, 15º API oil but as it didnt flow evenly the viscosity is going to be important and on this well it will be checked by wireline sampling tools and not a DST. In addition the well will drill a bit deeper than the original target depth so has an outside chance of finding more than just the historic discovery. With today’s loan and other innovative ways of funding, IOG has ensured that not only will the well get drilled but that the rest of the portfolio isnt being ignored. It may all be happening on a shoe-string but they certainly deserve to succeed if only for significant perseverance….
With no sign yet of a GSA and word that things are slowly happening in Tanzania, I took the opportunity yesterday to have a coffee with Jay Bhattacherjee, CEO of Aminex. Whilst there is much going on, especially with the recent Bowleven deal I can understand his frustration that things have been moving so slowly but they do say that in Africa things move very at snails pace. Given that the market is still waiting for news I can also understand investor impatience but I dont get the impression that there are panic stations and I know that Jay has exciting plans for the future when this is finally sorted, watch this space.
Spurs and the HubCap Stealers progressed through in the Boropa Cup last night and find Man Who and also Gary Neville awaiting, at least after Christmas it will make that Cup a bit more interesting.
In the Prem this weekend there are few stand-out fixtures what with high flying Foxes hosting Chelski on Monday night. The Noisy Neighbours host the manager-less Swans (Giggsy in the frame there), the Hammers host Stoke, the Cherries must fancy their chances against the Red Devils who can hardly put a team out, bless. The Eagles host the Saints, the Gooners are at Villa, the Baggies are at Fortress Anfield and Spurs entertain the Magpies. That just leaves Big Sam’s Maccams to host the Hornets if he is to get out of jail…
Looking a little further than Tyson Gobby this weekend has an interesting card which includes the rather more acceptable face of British boxing when Anthony Joshua takes on Dillian Whyte as he climbs up the ratings. The under-card there sees Chris Ewbank Junior also trying to prove his credentials, now that his dad is out of the Jungle he will at least have a voice in his ear. Also on the under-card is Tony Bellew and Luke Campbell with interesting bouts.
And finally there is racing at Cheltenham today and tomorrow very much worth a look and some really good European Champions rugby Cup action.