WTI $53.50 -$3.09, Brent $61.99 -$3.34, Diff -$8.49 -25c, NG $2.45 -10c

Oil price

Oil had another bad day to add to bad weeks and a bad month, May saw WTI down 16% and Brent 14%. The recent weakness is mainly linked to recent trade worries after President Trump took on Mexico at the end of last week to add to the battles on other fronts. This has led to investors going almost totally risk-off with the exception of gold perhaps. Oil also suffered as inventories in the US were again worse than expected, with lower supplies from Opec+ they should be drawing by now.

But the physical signs actually bode much better for oil, despite the modest increase by the Saudis recently they, and other members are on or below quota levels which can only see stocks draw as call on Opec oil exceeds production during this and next quarter. Brent expired on Friday with a decent backwardation indicating that the market is not awash with oil, in this sort of market a rally could be quite a squeeze…


I suspect that despite having seen an advance copy of tonight’s Panorama on the BBC the BP board may watch tonight’s show with clenched buttocks. From all the advance publicity they don’t come out well of paying a potential $9-12bn in royalties to Frank Timis following their deal to acquire his acreage in Senegal, they call it ‘the $10bn energy scandal and investigate in what seems like some detail. Timis also comes in for some stick by the look of it…

BP are also in the news as Reuters report that they have sold their Egyptian assets to Dragon Oil for north of $600m. More recently the market thought that SDX Energy might buy this package which eventually didn’t happen.

Rockhopper Exploration

An Egypt update from Rockhopper this morning where the company’s good run continues and early results from the Al Jahraa-11 in-fill well are most pleasing. The well has reached TD of 4,150 MD in the Kharita formation and net pay was as follows, ARC :7.2m TVD, ARD 4.0m, ARG 2.5m and Bahariya of 15m. Now completed with dual string production from the ARC,ARG and Bahariya reservoirs at 787 b/d gross. (RKH 22%)

In addition, Kuwait Energy as operator is evaluating a gas commercialisation solution through bids for construction of a sales gas pipeline to the El Salmiya gas plant. This is further good news from Rockhopper in their Greater Mediterranean acreage which is continuing the excellent momentum from last year.

And finally…

That was quite a weekend of sport with Liverpool beating Spurs 2-0 to win the Champions League final in Madrid.

Other winners were, Bangladesh in the cricket who beat South Africa notably, Anthony Van Dyck in the Derby, Saracens in the rugby and Andy Ruiz Jnr who whipped Anthony Joshua who was way too confident and clearly hadn’t prepared for the fight.

The Guildford cricket festival is under way and Surrey are entertaining Somerset who are batting first and are 3 down before lunch.

Today the CWC continues and as I write Pakistan are off to a flying start against England at Trent Bridge.