WTI $53.04 +84c, Brent $58.51 +66c, Diff $5.47 -18c, NG $2.84 -2c
Oil price
So, at long last we have a deal and provided it gets ratified in all the appropriate places sanctions will slowly be lifted. The ratifications are by no means taken as read, it may need Presidential veto in the US as Republicans grumble but lets assume it will happen. The oil price, which as I wrote first thing yesterday fell initially, before rising later, will have more downward pressure but dont expect a flood of Iranian crude any time soon. Indeed I expect, with the exception of oil stored afloat that not much meaningful crude will be added for about a year or so. Maybe something short of half a million barrels to go into the Opec equation which given how much they are over producing doesnt stack up to much.
Any major production increase will depend on investment and I do expect this to happen gradually. The arrivals lounge at Tehran airport will be full of Texans, Dutchmen, Chinese and the French to name but a few and inward investment should flourish. But this will take time and I dont expect any return to 2-4m b/d anytime soon but it may just happen in time for the oil price rise one can expect further down the line.
As to the here and now, the API inventory stats gave the market a nice little push, analysts expecting a draw of 1.2m barrels were yet again foxed by the reality which turned out to be as high as 7.3m, EIA numbers tonight boys…
A major milestone for Falcon this morning as it has announced that it has spudded the Kalala S-1 well in the Beetaloo Basin, Australia. The first fully funded, uncapped well in the three well 2015 programme is operated by Origin. Part of a 9 well programme, the drilling should last between 35-50 days and will tell the partners that interestingly include shale specialists Sasol, much about the prospects here and patient shareholders now have something to watch out for. Falcon is a well managed play, with proper financing and excellent partners so is definitely worth keeping on the radar screen. (Go to www.malcysblog.com for an interview with CEO Philip O’Quigley)
A quick word on Tower which has historically not been a value trap for investors, today it announces that it has raised £5.2m through a placing at 19p. Of the money raised £2.3m comes from new investor M&G Group who will now own 18% of the company, board and employees put up £0.9m.
The proceeds are to buy the Thali PSC offshore Cameroon which might be interesting, plus having another go at Namibia and carrying on in Zambia with a farm-out process. Best watched at the moment but if I get a meeting with the company I will add more later.
And finally…
Not much about ahead of a big day tomorrow but Froomey was on fire in the TdF yesterday and looks uncatchable…