WTI $64.30 +50c, Brent $69.87 +61c, Diff -$5.57 +11c, NG $3.20 +12c
Oil had another good week closing pretty much at the highs and shaking off all bearish sentiments. It is quite frankly quite nauseating to see the bears from leading investment banks and journos trying to pretend they were anything other than totally wrong last year. Ambrose must have written his article last week with clenched teeth and eyes wide shut.
There is little doubt that oil at 65 and 70 respectively may not have much upside, the rig count was up on Friday, 15 overall and 10 in oil and yes, shale production will be up. But where all these writers etc are coming from now is that world GDP growth is going to more than offset that US production, in my view it never was a significant bump in the road. Oil stocks have been coming down and with refinery run rates at record levels and likely to remain so with peak demand for distillates it would be surprising to see much bad news imminently.
As for geopolitical risk, do me a favour, for some just out of short trousers the Shah of Iran is something out of Game of Thrones…
SDX has announced this morning that it has spudded the ONZ-7 well in the Sebou Permit onshore Morocco. This well is the fifth well in the nine well campaign and like most of the others will only take 10-15 days to drill and, if successful, be able to complete, flow test and connect to infrastructure very quickly indeed. The model at SDX is working well and there is much upside from not only this drilling campaign in Morocco but development and exploration opportunities there and in Egypt. Next week sees an analyst visit to Morocco and I notice that there is substantial interest from the community, some of whom are only just catching up with the SDX story…
Wentworth Resources has announced that it has hired Eskil Jersing as its new CEO to fill the shoes of Geoff Bury. Jersing resigned from Sterling Energy last year so I suppose has the advantage of being readily available to start at WRL. I look forward to meeting with Mr Jersing as he is in an interesting position given that WRL is so strongly positioned at the moment.
The company has announced another funding, today raising £18.4m through a firm placing, a placing and an Open Offer. This will fund the latest strategy which is to enter the renewable fuels market and develop their second biorefinery in the US. They expect FID on this in mid 2019 so there is plenty of time to assess the new strategy. I recently met with CEO David Pummell and he has what can only be described as significant enthusiasm for this project and it certainly seems to have some legs, let’s wait and see…
A fantastic match yesterday at Fortress Anfield which could have gone either way until the HubCap Stealers broke Noisy Neighbours hearts with a short blast which even they couldnt quite come back from. Elsewhere Chelski were held by the Foxes, Spurs easily beat the Toffees and the Cherries saw off the Gooners who predictably given the wont sack Wenger are rubbish. The Red Devils go to the Potteries tonight.
In the NFL, the Jacksonville Jaguars beat the Pittsburgh Steelers to advance to the conference Championships. They face the Patriots on Sunday. The Vikings also beat the Saints last night and they come up against the Eagles for a place at Super Bowl LII.