WTI $43.49 +$1.78, Brent $46.04 +$1.99, Diff -$2.55 +21c, NG $2.55 -1c
It might just be an up week for crude oil but in modest volume and on, to be frank, fairly skinny reasons. After all, who on earth is still believing the old line, especially when coming from the KSA, that ‘we will have a special Opec meeting to discuss current low oil prices’? It goes with ‘the cheque’s in the post’ and other such lines that don’t carry any weight. The market grabbed at it though and conveniently forgot the Saudi July production number of 10.67m b/d which is clearly just a net export figure plus domestic demand, higher than usual this year due to a very hot summer.
Elsewhere the Chinese domestic oil production numbers continue to fall, July was down 8.1% y/y at 3.94m b/d due to uneconomic fields at these prices and exhaustion. Elsewhere the IEA valiantly tried to remain fairly bullish by expecting a ‘healthy’ stock draw in the third quarter but also sees a fall in demand again next year.
It’s a good news, bad news sort of day for THAL and one of the blogs favourite Chairmen, Duncan Soukup. A dispute with Sevmorgeo over unpaid bills in Ecuador had meant that in the last accounts DS had personally guaranteed the $1.1m owing to THAL. The good news is that the court appear to have ruled in favour of THAL but the bad news is that it is only for $750/- leaving DS out of pocket to the tune of $350/-. Knowing Duncan he will have taken the news with peaceful equanimity…..Thalassa has, along with other service companies, had a decent run this year but I suspect that business is still pretty tough.
Falcon Oil & Gas
With the polls suggesting that a Labour victory in the imminent elections in the Northern Territories I felt the need to have a chat with Philip O’Quigley of FOG. This is because FOG shares have fallen sharply in the last couple of months as the Labour party appear to have suggested a moratorium on fraccing should they win. With this win becoming more and more inevitable, investors have felt that this likelihood outweighs the possibility of a big find in the Beetaloo and cut and run. Talking to Philip, who also agrees that a Labour win is likely, he feels that until that actually happens and operator Origin sits down with the eventual winner it is business as usual.
I think that with Origin carrying on as usual and ironically, about to start this historically significant frac job, should this complete safely and with no hitches and prove up a worthwhile discovery the new Government may feel that the 10% royalty more than outweighs the concerns they have. That’s obviously not being cynical about politicians but using a healthy dose of realism. The bottom line is that nobody knows what will happen, politically a Labour win looks likely, operationally Origin couldnt be happier, and until August 28th uncertainty will prevail.
Warning, Low Bridge is sign that the Master of the tugboat pulling the FPF-1 does not want to see as finally the entourage move off and head through the Øresund Bridge between Denmark and Sweden on their way to the North Sea. As I write they appear to have passed under the bridge and Ithaca shareholders will be relieved to know that the rig is nearer to its destination.
Gulf Keystone announced yesterday that they have received a payment of $15m from the KRG as a part payment of recent invoices. The words drop and ocean come to mind.
Talking of drops and oceans whilst I was away yesterday I noticed that Gulfsands raised £1.5m at 3.125p. There is little to add as readers know what I think of this company and it is firmly in the list of ‘Have nots’ and avoided comprehensively.
As we approach the half way stage in the Olympics and the athletics begin the week has been pretty good for Team GB. One gold yesterday from the sprint cyclists and three silvers kept us in 8th position and Super Saturday ahead of us.
The Premier League starts this weekend with potentially the most exciting season ever in prospect. Tomorrow sees the Tigers v the Foxes, Saints v the Hornets, the Clarets v the Swans, Eagles v Baggies, Toffees v Spurs, Boro v the Potters and the Noisy Neighbours v the Maccams. On Sunday it’s the Cherries hosting the Red Devils and the Gooners take on the HubCap Stealers and on Monday its Chelski v the happy Hammers.
And in the Test match yesterday England got slightly out of jail as it could have been much worse if it hadnt been for Moeen. Having said that, quite how the umpires gave Hales out is anybody’s guess and Athers on Sky this morning showed him at his pompous belligerent worst…