WTI $39.94 -$1.91, Brent $42.49 -$1.95, Diff $2.55 -4c, NG $2.16 -7c
The day before the Opec meeting and pre-meeting jitters are an expected feature, yesterday the price fell with WTI closing below the magic $40 number. The figure that chartists lose a lot of sleep over is $38.99, a massive long term support level so watch this space. This morning crude has rallied around 50 cents as I write but its all in the melting pot ahead of tomorrow.
Sundry news out yesterday included Saudi Aramco cutting prices to Asian customers, EIA inventory stats showing a build of 1.2m barrels vs a forecast of a 696/- draw and the Saudis laying down their ideas about next year’s quotas implying that agreements will have to be across the board.
Jay Cheatham has been vindicated and it looks like the search for oil in the Eagle Ford/Woodbine sandstone has been successful. Todays announcement says that drilling has concluded on VOS#1 and that logs indicate the potential of a potentially ‘significant’ reservoir in the sandstone. The company will now bring in a smaller, cheaper rig and we will know in a while quite how big this discovery is. Whilst it should be noted that nothing can be validated until that testing has been concluded I will certainly be lowering the discount on my 200p a share valuation I have on the company. Watch this space but Jay wasnt wrong when he said that this prospect was the most exciting he had seen in decades of being in the industry. More tomorrow after I have spoken to the team….
Not much around today but I see that the roll of the HubCap Stealers continues as they put half a dozen on the Saints last night…