WTI $52.54 +$1.45, Brent $57.38 +$1.15, Diff -$4.84 -30c, NG $2.13 +5c
It has been some week for oil prices which were bad enough already if it hadn’t been for the EIA stats on Wednesday. Apart from being totally at odds with the API numbers they showed disappointing builds across the board. Crude built by 5.5m barrels although WTI was saved most of the grief as NYMEX drew by 1.5m b’s. Gasoline was up by 4.4m, distillates by 1.5m and refinery utilisation was up over three points to 96.4%.
But yesterday we had a half decent rally as you can see above but note the differential is now below $5 as WTI is protected somewhat and has this morning by the Gemscape numbers which are showing a 2.9m draw at Cushing.
More importantly, the usual Opec (mainly if not totally the KSA) fallback position has been adopted viz, (convene a meeting), probably next week in Abu Dhabi, start cutting production, (Saudi is staying below 7m b/d for August and September) and announce that demand remains strong, which it is. China has to a small extent come to the rescue with better than expected crude imports last month to 9.6m bbls up 14% and a rise in product exports into the bargain, with the Yuan rising albeit modestly today prices are slightly better again.
An update on the Strategic Review and Formal Sales Process (FSP) from AMER this morning which seems to be well under way. ‘Multiple parties’ have now agreed to participate in the FSP and all have signed CA’s which give them the due diligence and access to the Amerisur management.
A Barryroe update this morning but whilst it is good news it isn’t the piece we are all waiting for. The good news is that the Minister of State has given permission for the JV to undertake a seabed debris clearance and site survey over the Barryroe field which will commence next month if, and it’s a big if, they receive the moulah from the Orient…
Yesterday’s announcement from Touchstone was also a bit like the curates egg but the good news of the spudding of the COHO-1 exploration on the Ortoire block was better than a short term production shortfall, just. The well is testing gas prospects in the Herrera formation at 5,299-8,500 feet. The well offsets the Corosan-1 well drilled by Vintage Petroleum in 2001 and is targeting the same zones tested in that well in an up-dip location and is also expected to penetrate a second and previously untested thrust sheet that the Company deems prospective based on 3D seismic and offset production records.
As for production, sales were down in the 2nd quarter as some wells were offline for periods and the CO-372 had some mechanical issues resulting in a 2H number of 1,944 bbls/d but this number is already up to 1,829 this month.
Getting after the Ortoire Block has been important for Touchstone for some time now and it is correctly an important milestone which if successful would validate a lot of hard work. This is the first of four wells here and should take 28 days with testing, if needed another 30 days.
The news around Block in recent weeks has been incredibly confusing and yesterday’s announcement did not address that matter at all. It merely said that the company was preparing to horizontally sidetrack 38Z on the West Rustavi field and is one of four such wells.
I get the impression that the market is more interested to hear about the 16aZ well and what it is producing at the moment, as much has been written about it on social media recently. As far as I am aware some investors hadn’t expected the well to be suspended and when it ‘came back’ it was at a much lower rate of 360 bopd. Yesterday CEO Paul Haywood spoke to Proactive Investors and whilst the excellent Andrew Scott pushed hard he was unable to get a number from him as to current production. I have had a reply from the company and am hopefully going to see Paul Haywood shortly, which should sort things out, in the meantime it is Confused.com all around.
It is August the 9th and the Premier League starts today, what did we do without it he jokes… Tonight Liverpool host the freshly promoted Canaries to kick the season off, elsewhere over the weekend the standout fixtures are probably the Hammers v the Noisy Neighbours, Spurs who take on Villa, the Magpies under new management but not ownership unfortunately welcome the Gooners and Chelski visit the Theatre of Dreams.
Horse-racing is at Ascot for the boring Shergar Cup and there is a good card at Haydock.