Posted by Malcolm Graham-Wood - Malcy's Blog
WTI $69.30 +78c, Brent $73.93 +49c, Diff -$4.63 -29c, NG $2.78 +4c
Saudi Arabia has announced that this morning that two VLCC's carrying Aramco crude oil were attacked by Yemeni Houthi militias with very slight damage to one vessel only. Nevertheless the KSA has halted all shipments through the Bab Al-Mandab straits which link the Red Sea with the Gulf of Aden and has Yemen on one side and Djibouti on the other. According to sources up to 5m b/d can be transported from the Saudi East coast so this will inevitably up the ante in the area. The most important point worth making is that following recent increases in supply by Saudi Arabia in particular, whilst the world is currently well supplied with oil there is little room for error which this would most certainly be, stand by for escalation of the situation in the Gulf…
This news rather obscured the EIA inventory stats which showed a 6.147m stock draw in crude oil with forecasters expecting nearer 2.234m and a decent draw of 2.3m in gasoline and also in distillates, also not forecast. Net crude imports fell and whilst a large amount of the draw was on the West Coast it still brings stock levels well below Opec+ targets.
Range has announced a £1m subscription at 0.11p as they continue to accelerate growth strategy in the company's assets in Trinidad. The money will mean increased production and thus cash flow and will hopefully mean that ambitious targets will be met. Whilst it is not ideal to raise money at such a discount I understand that it is important to continue investing in the waterflood at Beach Marcelle and ultimately to drill more wells. It really is a question of short term pain for long term gain and sometimes these tricky decisions have to be taken .
IGas announced yesterday that they had formally launched an appeal against the councils who denied planning consent for testing at Ellesmere Port. When you look at the original decision it makes you worry for the sanity of some of those elected officials who make such calls based on incorrect concerns about fraccing. Whilst it is entirely appropriate for all processes to be gone through it might have been better if a more logical and tempered approach might have been made in the first place. Let's hope that IGas get treated like Cuadrilla did in their announcement yesterday and a more grown up approach to energy security can prevail.
More changes at Solo as has been telegraphed lately as Alastair Ferguson joins the board and will become Chairman on 6th August. Neil Ritson will leave the board that day and remain only as a technical advisor. This signals the very serious approach I mentioned when Jon Fitzpatrick joined the board recently as Ferguson has very heavyweight credentials from BP, TNK BP, Zoltav Resources and JKX Oil & Gas. A leading player in the industry today told me that Ferguson has ‘forgotten more about gas than most people ever learn'.
The transformation continues at Solo where I get the distinct impression that nothing is sacred and everything is on the table which should bode very well for shareholders in coming months. I suspect that this board is going to get things done and at a rapid pace especially following the canny deal by Aminex recently shines the spotlight on the Ruvuma asset…
The counter party, or should I say ‘the major international oil company', that is working with BPC at present has extended its agreement by one month until 1/9/18 at a cost of another very welcome $250,000. It is quite interesting in the sense that it is taking longer than the original three months so clearly not an open and shut case.
This week's VoxMarkets Podcast covers a number of stories from the last fortnight, the link is below.
Also, last Friday I spoke to Doc Holiday of Total Market Solutions about a few companies in the sector.
Football is already back in the spotlight, last night Celtic beat Rosenborg 3-1 and if they succeed in this round they will face AEK Athens next time.
In the Boropa Cup we are at the qualifying second round which has thrown up an intriguing tie between Aberdeen and Burnley tonight, also in action are Hibs and Rangers.
And Geraint Thomas edges closer to winning the Tour de France with Chris Froome not catching him yesterday.
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