WTI $67.04 -$1.17, Brent $77.56 -16c, Diff -$10.52, NG $2.95 +7c

Oil price

With July Brent expiring and August closing at $77.56, down only 16 cents, the differential has now exceed ten bucks for the first time in three years. WTI is a mix-up, flat to the boards where it can but pipeline capacity almost fully utilised and with no sign of that changing much for the best part of a year trucks and trains will be transport option of choice.

Recent price strength has many parents, geopolitical concerns of course but genuine shortage of production are clear, in May Opec only produced 32m b/d, another fall with tightening in some Gulf countries and of course with Venezuela continuing to collapse. Yesterday’s delayed EIA inventory stats also helped, a draw of 3.6m barrels was way in excess of the scribblers +244/- b’s and with stocks drawing at Cushing even the gasoline add wasnt a concern. After all the driving season started officially on Monday and even in March good old vehicle miles increased to 268.7bn miles…………………..

Hurricane Energy

Hurricane has released an operational update this morning stating that the Lancaster EPS well re-entry and completion operations have started. The Lancaster EPS will use two currently suspended horizontal wells , 205/21a-6 and 205/21a-7Z which produced 9,800 stb/d and 15,375 stb/d constrained by surface equipment.

This is more good news from Hurricane who are demonstrating that so far the Lancaster EPS development is being carried out on time and budget and that first oil is still expected 1H 2019.

Ophir Energy

News yesterday that Schlumberger had ‘exited’ the Fortuna LNG project was pretty grim for Ophir but goes some way to explaining the recent departure of former CEO Nick Cooper. This means the dissolution of the One LNG venture SLB had with Golar LNG Partners and potentially the development falling over.

The RNS states that remaining partners Golar and Ophir remain ‘actively engaged’ in senior level discussions with ‘a number of counterparties’ over a financing solution for the project. The new CEO or maybe the temporary one will have their work cut out to revive this one, presumably SLB had found better projects to invest in but it leaves Ophir in a pretty sorry state. Having said that I actually liked the recent acquisition and maybe management can focus on this type of deal in the future especially if Fortuna doesn’t happen right now.

Wentworth Resources

Wentworth has updated the market on recent payments from Mnazi Bay. May saw $2.7m in which TPDC paid for one month and Tanesco for two months of gas sales. Gross production in May was 79 MMscf/d which is good and the long-awaited arrival of the new CEO will start with a positive situation and plenty of upside.

And finally…

A true summer’s weekend of sport is on the way and nothing sums that up more than the Epsom Derby tomorrow with the Oaks this afternoon.

Another sign of summer is the playing of test cricket at home and today sees the start of the second match against Pakistan at Headingly. We must hope that in the week England have reminded themselves of how to play the game but after a shameful performance at Lords we should expect nothing.

The MotoGP circus moves to Mugello in Italy this weekend where the fans will be preparing their fireworks for local hero Valentino Rossi. Championship leader, Marc Marquez might just upset their party.