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Oil prices were mixed on Monday to their highest in over a year, with Brent nudging past $60 a barrel, boosted by supply cuts among key producers and hopes for further U.S. economic stimulus.
Brent rose $1.22, or 2.1%, to settle at $60.56 a barrel, while U.S. West Texas Intermediate rose $1.12, or 2%, to settle at $57.97 a barrel. Both benchmarks were at the highest since January 2020.
“Managing to breach $60 again feels like the market is finally resurfacing after the long struggle and (taking) a proper breath,” said Rystad Energy’s vice president for oil markets Paola Rodriguez Masiu. “It offers a feeling of normality again.”
Brent and WTI have risen more than 60% since the start of November due to optimism around coronavirus vaccine distributions as well as production cuts from OPEC+ members.
“There seems to be a paradigm shift in the market,” said analyst at Price Futures Group in Chicago. “There is a sense that the glut of oil supply is disappearing more rapidly than anybody thought possible.”
Saudi Arabia pledged extra supply cuts in February and March following reductions by other members of the Organization of the Petroleum Exporting Countries and its allies.
In a sign that prompt supplies are tightening, the six-month Brent spread hit a high of $2.54 on Monday, its widest since January last year, a signal of demand for current supply.
OCBC economist Howie Lee said the world’s top exporter Saudi Arabia sent a “very bullish signal” last week when it kept monthly crude prices to Asia unchanged despite expectations for small cuts.
“I don’t think anybody dares to short the market when Saudi is like this,” he added.
Investors are keeping watch on a $1.9 trillion COVID-19 aid package for the United States that is expected to be passed as soon as this month.
Hopes that Iranian oil exports would soon return to the market have been dampened, supporting oil prices.
U.S. President Joe Biden said the United States would not lift sanctions on Iran simply to get it back to the negotiating table, while Iran’s Supreme Leader Ayatollah Ali Khamenei said all sanctions should be lifted first.
you can never keep going up and we have to take the dips along the way.
I believe we are so close to this share turning itself around now. Just needs the updates from the bod and we can start moving forward.
Ideally we need a good base level ahead of any campo news as I firmly believe that will come through.
Just a recap that Martin did mention to me that if we could get back up to $50-55 a barrel that is a game change for us ( this was when oil was in the mid 30's).
We are now entering $60, granted we need to now what kind of deal they have, weekly, fortnightly, monthly average etc but if we can maintain this level for the rest of the month out average price for Feb could be $58-60
Totally agree Jaggers.
What interests me is they have dilled this well ( I think they have already tested it ) and have decided to look at the pen play around the filed with Monte Aymond.
To me this shows that they have found something and now want to expand on this. Could it be more than the initial top end of 88bcf who knows?
one thing is for sure with the amount of workovers there doing to increase cashflow my guess is there looking to invest that back into these projects. I could be wrong but would make sense to me.
Oil nearly touching $60 now which is really good to see.
Average barrel price last year was around $35-37 so are bottom line should be looking a lot healthier now.
I'm hoping we will get a production update very soon as we must be over 2500 boped by now?
topped up this week and got my average down to 1.27 now so not too bad.
only need 4p now for my dream so feeling really good for the months ahead!
Happy Friday All!
Me and Mark were discussing this last night. We came up with a crazy theory that the current negotiations with the Bolivian asset would including funding towards Tapi for Q2 as part of the deal which would give us a free ride. You never know what there negotiating behind the scenes but if it was me I would be looking for the best possible deal.
Hopefully we get some updates soon. I would expect a production update next as I believe they will have Jan's figures ready by now depending on what deal they have in place regards to barrel pricing.
It can work in a few ways, they can either have a weekly, fortnightly or monthly barrel price average for the oil they have produced to sell on.
I feel confident we have now achieved over 2500boepd but lets wait for the results.
Oil rose in early trade on Wednesday on expectations global oil stocks will fall back to more normal levels this year and as U.S. lawmakers moved closer to approving President Joe Biden’s $1.9 trillion COVID-19 aid bill without Republican support.
U.S. West Texas Intermediate (WTI) crude futures climbed 11 cents, or 0.2%, to $54.87 a barrel at 0130 GMT, in a third straight day of gains. The benchmark hit a one-year high of A$55.26 on Tuesday.
Brent crude futures rose 16 cents, or 0.3%, to $57.62 a barrel, in a fourth straight day of gains after hitting $58.05 on Tuesday, its highest in more than 11 months.
Analysts said the market was buoyed by the latest assessment by the Organization of the Petroleum Exporting Countries and allies, together known as OPEC+, that oil stockpiles will decline to below a five-year average by June.
That showed the producers’ output cuts were succeeding in bringing the market back into balance.
“The strategy was very clear. OPEC and allies set out to cut a deal that would normalise global excess inventory through 2021 - well, they’re on track,” said Lachlan Shaw, head of commodity research at National Australia Bank.
OPEC+ expects output cuts will keep the market in deficit throughout this year, peaking at 2 million barrels per day in May, even though it revised down its outlook for demand growth, a document seen by Reuters on Tuesday showed.
Further supporting the market, industry data after the market closed on Tuesday showed U.S. crude and gasoline inventories fell unexpectedly.
The American Petroleum Institute, an industry group, reported U.S. crude oil inventories fell by 4.3 million barrels in the week to Jan. 29, compared with analysts’ expectations in a Reuters poll for a build of 446,000 barrels.
Gasoline stocks fell by 240,000 barrels, defying analysts’ expectations for a build of 1.1 million barrels, while distillate inventories, which include heating oil and jet fuel, fell by 1.6 million barrels, a bigger draw than expected.
U.S. government data is due at 1530 GMT from the Energy Information Administration.
Analysts said while there are still short-term risks around demand due to the spread of COVID-19, vaccines are being rolled out successfully and should lead to lockdowns being eased and people moving around more.
“So I think that’s certainly buttressing demand hopes, together with impacts from stimulus,” NAB’s Shaw said.
From my conversation with Martin he has mentioned that they were waiting to bring equipment and personal in to the country but this was being restricted du to the travel bans.
personally I thin there brining in an out sourced company for the second opinion. I believe this well ahs already been tested to some degree and there fully aware what is down there.
You look at previous rns's that mention the drill and the surrounding area with added lng network kind of gives it away.
Just a question of how much.
I was hoping they might have started eases the borders again but it looks like we will have to wait until march at the earliest.
Argentina has decided to keep its borders closed to non-resident foreigners until February 28, in a bid to prevent the spread of the novel coronavirus, its was announced in a government gazette.
The gazette released on Monday carried the signatures of Chief of the Cabinet of Ministers Santiago Cafiero and the Ministers of the Interior and Health, Eduardo de Pedro and Gines Gonzalez Garcia, respectively, Xinhua news agency.
The decision to extend the ban follows "a new report (from the Health Ministry) that recommends the maintenance and adoption of new preventive measures to protect public health", state news agency Telam said.
As a result, direct flights to and from the UK remain suspended, given the new Covid-19 variant detected there.
The National Directorate for Migration (DNM) will help determine what steps nationals, foreign residents and non-resident foreigners who are direct relatives of Argentine citizens or residents, need to take to enter the country.
According to the gazette, the DNM and the Health Ministry "will determine the flight schedules and the number of passengers who will gradually and daily enter the country, especially via flights from the US, Mexico, Europe and Brazil, keeping the frequency of passenger flights to the first three destinations reduced by 30 per cent and to Brazil by 50 per cent".
The decision recommends nationals and foreign residents, especially those over 60 years of age or belonging to high-risk groups, "defer their trips abroad", unless essential.
Oil prices rose around 1% on Tuesday after major producers showed they were cutting crude output in line with their commitments on restraint, supporting a market thrown out of kilter by weak demand during the coronavirus pandemic.
Brent crude was up 0.9% a barrel while U.S. oil gained 1% a barrel. Both contracts rose more than 2% in the previous session.
OPEC crude production increased for a seventh month in January, a new survey found, after the group and its allies agreed to ease supply curbs further, but the growth was smaller than expected.
The Organization of the Petroleum Exporting Countries was pumping 25.75 million barrels per day (bpd) in January, the survey found, up 160,000 bpd from December.
Russian output increased in January but in line with the agreement on reducing production, while in Kazakhstan oil volume fell for the month. Both countries are members of the OPEC+ grouping that banded together to help support prices with production cuts.
The critical take away from yesterday’s oil market recovery rally is that OPEC+ members seem to be taking their commitment to output cuts to the heart. Having OPEC+ singing from the same hymn page is music to every oil trader’s ears.
Russian oil and gas condensate output rose by 120,000 barrels per day (bpd) to 10.16 million bpd in January from December, following the agreement on production restraint, two sources familiar with the data told reporters on Monday.
Kazakhstan cut its oil production by 2% in January from the previous month due to power outages, which also improved its compliance with the OPEC+ deal, two industry sources familiar with the matter said and Reuters calculations showed on Monday.
Helping to support prices, a severe blizzard hitting a large area of the northeastern United States is pushing up demand for heating fuel.
Just a couple of updates from Argentina.
Nice to see shell have made an investment -
https://www.ogj.com/general-interest/article/14195611/equinor-ypf-partner-with-shell-offshore-argentina
https://www.spglobal.com/platts/en/events/americas/caribbean-energy
code 1 prevails.
Agree we have another base option here.
I know Martin and co are very busy at the moment, I was thinking we will probably get an update on production beginning of Feb as they will want a full months figures so would make sense.
that bond must be close now too.
Looks like Argentina is coming out of there second wave of covid cases which is a good sign. However until travel can be arrange and access granted I feel campo drill will be delayed further. We all knw that drill could open up that play area massively for echo.
But as we wait we can focus on our workover progression which will gain us extra money to help fund and future LNG project on that play area.
Oil prices climbed on Wednesday after industry data showed U.S. crude stockpiles fell unexpectedly last week and China, the world’s second-biggest oil user, reported its lowest daily rise in COVID-19 cases, bolstering hopes of a pick-up in demand.
U.S. West Texas Intermediate (WTI) crude futures rose 0.2% a barrel, reversing some of Tuesday’s loss. Brent crude futures climbed 0.2% a barrel, adding to a small gain on Tuesday.
The American Petroleum Institute (API) reported crude oil inventories in the United States, the world’s biggest oil consumer, fell by 5.3 million barrels in the week to Jan. 22 compared with analysts’ expectations for a build of 430,000 barrels.
However, the data showed gasoline stocks rose by 3.1 million barrels, which was much more than expected.
The crude oil drawdown has offered some support to the market in early trading this morning with the market expecting a build On the product side, the numbers were less constructive.
The API data showed distillate fuel inventories, which include diesel and heating oil, rose by 1.4 million barrels, compared to expectations for a draw of 361,000 barrels and refinery runs fell by 76,000 barrels per day.
It’s difficult for oil traders to make a definitive near-term shift to the next price level higher given the very uncertain near-term demand outlook.
However, prices were supported by easing worries about a sharp drop in travel over the Lunar New Year in China, the world’s largest oil importer, as the number of COVID-19 cases appears to be declining.
Official data showed 75 new confirmed cases of COVID-19 on Wednesday, the lowest daily rise since Jan. 11.
Government officials have been urging people not to travel during the Lunar New Year holiday break, when hundreds of millions usually travel to help contain a new wave of coronavirus infections.