WTI $33.97 -$2.00, Brent $34.23 -$2.19, Diff -26c, -19c, NG $2.27 -6c
A short blog today, the oil market was carnage yesterday and company announcements are thin on the ground, not surprising in these markets.
Crude oil fell sharply, the worries from China are leading the fall and with the devaluing yuan traders sense a currency war into the bargain. The inventory figures, as intimated here yesterday were difficult to read but overall the market read them as bad news. The reason for that was not the headline figure, a draw of 5.09m barrels would normally be good news but not this time, it seems that the year end tax breaks were responsible for much of that although the analysts still got the sign wrong. No, it was the 10.6bn build in gasoline inventories and 6.3m build in distillates that worried the market, where has all the demand gone? Into the bargain stocks built at Cushing rather emphasising the tax story.
An Argentina update from President this morning and all appears to be looking good under the circumstances for the company. The two workovers on the Dos Puntitos field in the Puesto Guardian concession have been completed early and on budget, exceeding management expectations, production from these two previously shut-in wells now aggregates 120 bopd. There are plans afoot to start a follow-up stimulation programme of 5 wells in 2016 with further to follow after that.
On the political front there is good news post the Macri election victory in December, the Government is strongly promoting the oil and gas E&P industry and the crude oil price has been set at $67.50 per barrel post the 30% devaluation of the Peso. Other moves by the Government are expected to be beneficial to President and are expected to increase production, lower costs and progress strategic discussions for its multi TCF gas projects.
Overall the last few months have shown that faith in Argentina by President has been well rewarded, the workovers continue to increase production and revenue, the outlook is much more positive and with a high oil price investments can go ahead, a ray of sunshine in a difficult market you might say…
The Clueless Cup continues with the second semi final going to the Toffees 2-1, the Noisy Neighbours will hope the get that back in the second leg, back to the ’66 World Cup Final or if you are Scottish the ’67 game…