Oil prices are taking a breather today after Wednesday’s strong rally due in large part to the gasoline inventory draw and low production levels in Venezuela.
World Oil Market
Nigerian President Muhammadu Buhari, the 76 year old former military ruler, has been re-elected. Constant threats to the flow of crude from armed groups and thieves, Buhari has plans to develop a backbone of stable power, roads and rail lines for agricultural expansion and industrialization in Africa’s most populous nation. Providing two-thirds of government revenue for Nigeria, the President needs all the money he can get from oil. “Oil revenue is still what dictates government spending and they will need to keep production going,” said Jubril Kareem, a Lagos-based analyst at Ecobank Energy Research.
WTI oil prices rose Monday morning to $56.94/barrel due to a barrage of bullish headlines which puts this year’s oil rally north of 22% and climbing.
As daily energy sector market participants, we are often reminded how much drama, information or data needs to be vetted and digested on any given day. Unlike the set of “Oakdale, Illinois” in “As the World Turns” (1956 – 2010) where melodrama was the main theme and “the bleakness of winter, the promise of spring, the fullness of summer, and the harvest of autumn” were everyday life, the world of energy is a lot less predictable. Below you will find just some of the current headlines, event risks and technical levels that have to be digested just in one day:
The CNOOC, China National Offshore Oil Corporation, has made a significant gas discovery in the central North Sea. The CNOOC, joined by Joint Venture (JV) partners Total and Edison, estimate the find to potentially 250 million barrels of oil. Glengorm, potentially the biggest find since 2008, sits 118 miles east of Aberdeen, Scotland close to existing fields the Culzean project and Elgin-Franklin platform. “Our strong position in the region will enable us to leverage existing infrastructures nearby and optimise the development of this discovery. Glengorm is an achievement that demonstrates our capacity to create value in a mature environment thanks to our in-depth understanding of the basin.”