Oil price, Hurricane, Columbus, Jadestone And finally…
WTI $61.66 -4c, Brent $70.62 +23c, Diff -$8.96 +27c, NG $2.62 +2c
Oil price
Last week, despite all the shenanigans oil didn’t do much, WTI fell 59 cents and Brent 67, to put that into context, this morning they are up 76c and $1.06 respectively. The news this morning is on the back of reports that four ships have been attacked off Abu Dhabi of which two are Saudi tankers. With President Trump having announced a massive increase in firepower heading for the Gulf this is unlikely to quieten down.
Apart from the inevitable concerns over the trade talks and inventory build most other news is positive. The rig count showed further falls, of 2 rigs overall and 2 in oil whilst both Norwegian and Nigerian producers are suffering shut-ins for differing reasons. The quarter looks like being quite tight with regards supply and demand and the call on Opec will be higher than they are delivering and the June meeting is unlikely to change that much. So called ‘sophisticated investors’ have cut back their exposure to WTI but increased it on Brent, now that really is a conundrum….
In an update this morning Hurricane announce ‘the introduction of hydrocarbons into the the process system of the FPSO, the Aoka Mizu’. This is the final stage of commissioning for the FPSO and technically marks the commencement of the start-up phase during which each of the two wells will be individually tested and shut-in for ‘data gathering purposes’. At this stage there is also the cleaning and testing (known as ‘pigging’) of flow lines for ‘flow assurance processes’, only when all this is complete will there be simultaneous flow from both wells for 72 hours after which the ‘first oil’ announcement will be made.
At long last the denouement of the first stage is visible but the company should be congratulated for not rushing the process. Investors will shortly see the first oil announcement which will be followed by what was always the case, a prolonged period of production before any chickens are counted. Investors are also aware that Hurricane are currently drilling the Warwick Deep well in the Greater Warwick area for which it is carried by Spirit under the Farm-out deal of last year and which also has significant potential.
CERP have announced that they have been granted a Private Petroleum Licence for the Bonasse Licence Area in S W peninsula of Trinidad. This formal recognition by the Ministry that Columbus has the right to exploit is needed to continue with the company’s operational and drilling campaign. CEO Leo Koot said that ‘any discovery, even a modest one here would have the potential to transform the company in this hard fought licence’. I believe that this is indeed ‘critical’ for the prospects for the area and thus is of significant importance to the company.
A Stag oilfield update from Jadestone who say that the well was successfully concluded and that the rig was moving off location. Production will start up in a few days and will be at levels in-line with pre-drill estimates although these are not shared in this announcement.
I understand that the Jadestone management are in town next week and after our last meeting which was most impressive I am very much looking forward to catching up again.
Link
After I did the IGTV interview on a few oil stocks and shares I was persuaded to have a general chat about the oil price at the moment, hardly contentious but here is the link…
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