Dear Readers
I will not be posting here for the forseeable future. As I mentioned to some of you already, we have been successful in our application to the Central Bank in Dublin Ireland to launch our own stock broking firm. I will now be dedicating my time to this and developing a website for the business that will contain similar new flow but in real time mode. For those of you that have found the site useful and are interested in any of our business services ( trading or advisory or just for a simple chat), please contact me at ukoilshares@gmail.com for further details. Thank you for all the comments and feedback. Good luck to each and all of you in the future with your investments
Murph
Thursday, February 22, 2007
Wednesday, February 21, 2007
GOODBODY NOTE ON TULLOW DATED 21st FEB
Tullow (Buy, Closing Price £3.90)
Woodside FY06 release.
Analyst: Gerry HenniganAustralian-based Woodside Petroleum, the operator of the Chinguetti field offshore Mauritania in which Tullow has a 19% stake, released FY06 results this morning. The relevant details from a Tullow perspective were: (i) production is currently averaging 20 -22 kbopd; (ii) initial production from infill well Chinguetti-18 is to commence by the end of Q1 at a rate of 6 - 10 kbopd; (iii) ongoing workover to optimise production at Chinguetti-14; and (iv) new seismic on Tiof and Chinguetti is to start in March. While the current rate of production continues to drift lower (average rate of 23.4 kbopd in Q4'06), the rate of decline has slowed and the Chinguetti-18 infill well, which had a net pay of 35m, should reverse the trend once production commences at the end of March. We are forecasting net production to Tullow of 4.1 kbopd out over the forecast period on the assumption that production will at best stabilise. Chinguetti-18 may provide some upside to that, albeit that the long term implications of efforts to boost production remain at an early stage. On reserves, Woodside recorded a 27% increase year-on-year, though within that there was a significant cut in Chinguetti reserves to 11.7 mbo down from a pre-production level of 123 mbo.
Woodside FY06 release.
Analyst: Gerry HenniganAustralian-based Woodside Petroleum, the operator of the Chinguetti field offshore Mauritania in which Tullow has a 19% stake, released FY06 results this morning. The relevant details from a Tullow perspective were: (i) production is currently averaging 20 -22 kbopd; (ii) initial production from infill well Chinguetti-18 is to commence by the end of Q1 at a rate of 6 - 10 kbopd; (iii) ongoing workover to optimise production at Chinguetti-14; and (iv) new seismic on Tiof and Chinguetti is to start in March. While the current rate of production continues to drift lower (average rate of 23.4 kbopd in Q4'06), the rate of decline has slowed and the Chinguetti-18 infill well, which had a net pay of 35m, should reverse the trend once production commences at the end of March. We are forecasting net production to Tullow of 4.1 kbopd out over the forecast period on the assumption that production will at best stabilise. Chinguetti-18 may provide some upside to that, albeit that the long term implications of efforts to boost production remain at an early stage. On reserves, Woodside recorded a 27% increase year-on-year, though within that there was a significant cut in Chinguetti reserves to 11.7 mbo down from a pre-production level of 123 mbo.
Oil settles above $60
Oil prices settle above $60 a barrelNEW YORK (AP) - Oil prices settled above $60 a barrel for the first time this year on Wednesday after a spate of refinery shutdowns threatened to cut into supply. Increasing tensions over Iran's uranium enrichment program also helped to boost prices.Light, sweet crude for April delivery on the New York Mercantile Exchange climbed $1.22 to settle at $60.07 a barrel. Brent crude for April delivery also rose $1.37 to $59.35 a barrel on the ICE Futures Exchange in London.The refinery shutdowns also drove products higher. Heating oil gained nearly 4 cents to settle Wednesday at $1.6816 a gallon, while natural gas futures rose 6 cents to $7.646 per 1,000 cubic feet. Gasoline futures settled at $1.7047 a gallon, up 5.7 cents.TEPPCO Partners LP said Wednesday that part of a refined products pipeline was shut down after a leak was discovered in Indiana, according to Dow Jones Newswires. TEPPCO gave no estimate of how much diesel was lost or when the pipeline will be back in service.The news comes on the heels of an AP report late Tuesday that said BP shut down its Northstar oil field in the Arctic Ocean after a small leak was found in a gas line. The shutdown has taken about 40,000 barrels of oil offline each day Friday or Saturday, according to a BP spokesman. The company doesn't know when the field will resume operations."The BP news late yesterday didn't have that much of a pop on the market, but after the one in Indiana, these refinery issues got the market back on the upside," said Phil Flynn, an analyst at Alaron Trading Corp. "Some people are also thinking that Iran is adding a bit to the buying in the market today."The International Atomic Energy Agency, the U.N nuclear watchdog, was expected to confirm on Thursday that Iran -- OPEC's No. 2 exporter -- continues to enrich uranium, a finding that could trigger harsher U.N. sanctions.On Wednesday, Iran called for talks with the U.S. regarding its uranium enrichment activities, but showed no signs of halting its program."The enemy is making a big mistake if it thinks it can thwart the will of the Iranian nation to achieve the peaceful use of nuclear technology," Iranian state TV's Web site quoted President Mahmoud Ahmadinejad as saying.On Tuesday, Ahmadinejad offered a more conciliatory tone on the issue, saying it was no problem for Iran to halt enrichment, but that "fair talks" demanded a similar gesture from the West.Traders are also looking to the release of the government's fuel stocks data due out Thursday.Data from the Department of Energy is expected to show domestic crude oil stockpiles rose in the week ended Feb. 16, while distillates are seen falling, according to a Dow Jones Newswires survey of analysts.Crude oil inventories are expected to build by about 700,000 barrels, according to the mean of nine analysts' forecasts. Distillates, which include heating oil and diesel, are expected to fall by 2.8 million barrels.Gasoline inventories are seen building by about 100,000 barrels, the analysts' average says."This report is likely to reflect some of the coldest temperatures we've had" this winter, Flynn said.Bitterly cold temperatures in the first weeks of February helped boost oil prices to nearly $60 a barrel from a 20-month low of $49.90 on Jan. 18, after an unseasonably warm January.However, oil prices dropped more than $1 a barrel on Tuesday after warmer weather moved into the Northeast, which consumes 80 percent of the nation's heating oil. The U.S. National Weather Service is forecasting above-normal temperatures in the region through March 5."People are thinking the U.S. weather is going to be much warmer than expected, so heating oil demand should be easing," said Tetsu Emori, chief commodities strategist with Mitsui Bussan Futures in Tokyo.The National Oceanic and Atmospheric Administration also expects fuel demand in the region to be below long-term averages this week, the first such forecast in a month.Tim Evans, an energy analyst at Citigroup Futures Research, pointed out that while demand for heating oil typically declines week by week during this time of year, inventories also fall through March and into April."The typical seasonal low occurs in the third week of April," Evans said.
LME REVIEW
LONDON (Dow Jones)--London Metal Exchange tin built upon earlier strength, soaring to a fresh record high Wednesday, with market participants keeping a close watch on the developments in Indonesia for further price direction, traders said.
Three-month tin traded just shy of the $14,000 a metric ton mark driven by follow-through momentum buying after a strong morning session in Europe, a trader said.
News that seven Indonesian tin producers may be granted export licenses on Feb. 23 - including the world's largest integrated miner PT Timah - has the potential to send prices lower, but traders have said they will wait before believing the news. This uncertainty has helped push prices higher near term.
Supply concerns in Indonesia have dominated the tin market of late. Indonesia recently shut down its private mining and smelting operations on Bangka island, where the country's largest tin reserve is located, over allegations of environmental damage and tax evasion.
The Trade Ministry then set new requirements on tin exports, including a minimum 99.85% purity standard, and demanded producers prove they mine tin ore from their own concessions and have paid royalties before they can export.
For the time being, further upside is expected until clarification of the Indonesian situation, traders said.
Meanwhile, several of the base metals rose during afternoon European hours due to bargain-hunting, said Michael Widmer of Calyon.
Three-month copper rose over 1% to a PM kerb of $5,790/ton from Tuesday, while three-month aluminum rose 0.5% to a PM kerb of $2,757/ton.
Earlier, prices had fallen due to a widening of the spreads and a push beneath key technical sell-stops, said an aluminum trader. However, good support is seen around $2,740/ton and then $2,680/ton, the trader added.
Three-month nickel remained slightly under pressure on profit-taking and fell 0.2% to a PM kerb of $39,800/ton.
However, LME nickel stocks fell 468 tons to 3,930 tons Wednesday, which provides good price support. With canceled warrants - or material accounted for and to be drawn down at a later date - at 47% Wednesday, available stocks comprise less than one day's worth of global nickel consumption.
Three-month lead edged back up towards its recent record high of $1,845/ton as strength spread across the entire complex.
Moreover, ongoing supply concerns at Xstrata's 161,000-ton Northfleet lead refinery in the U.K. further supported prices. Xstrata has temporarily restricted deliveries to Northfleet, which takes its feedstock from Mount Isa in Australia. Prices in dollar a metric ton.
3 Months Metal Bid-Ask Change from
Tuesday PM kerb
Copper 5790.0-5800.0 Up 70
Lead 1825.0-1826.0 Dn 5
Zinc 3350.0-3360.0 Up 25
Aluminum 2757.0-2758.0 Up 15
Nickel 39500.0-39505.0 Dn 300
Tin 13825.0-13850.0 Up 335
Aluminum Alloy 2200.0-2210.0 Unch
Aluminum Alloy 2170.0-2180.0 Up 10
Three-month tin traded just shy of the $14,000 a metric ton mark driven by follow-through momentum buying after a strong morning session in Europe, a trader said.
News that seven Indonesian tin producers may be granted export licenses on Feb. 23 - including the world's largest integrated miner PT Timah - has the potential to send prices lower, but traders have said they will wait before believing the news. This uncertainty has helped push prices higher near term.
Supply concerns in Indonesia have dominated the tin market of late. Indonesia recently shut down its private mining and smelting operations on Bangka island, where the country's largest tin reserve is located, over allegations of environmental damage and tax evasion.
The Trade Ministry then set new requirements on tin exports, including a minimum 99.85% purity standard, and demanded producers prove they mine tin ore from their own concessions and have paid royalties before they can export.
For the time being, further upside is expected until clarification of the Indonesian situation, traders said.
Meanwhile, several of the base metals rose during afternoon European hours due to bargain-hunting, said Michael Widmer of Calyon.
Three-month copper rose over 1% to a PM kerb of $5,790/ton from Tuesday, while three-month aluminum rose 0.5% to a PM kerb of $2,757/ton.
Earlier, prices had fallen due to a widening of the spreads and a push beneath key technical sell-stops, said an aluminum trader. However, good support is seen around $2,740/ton and then $2,680/ton, the trader added.
Three-month nickel remained slightly under pressure on profit-taking and fell 0.2% to a PM kerb of $39,800/ton.
However, LME nickel stocks fell 468 tons to 3,930 tons Wednesday, which provides good price support. With canceled warrants - or material accounted for and to be drawn down at a later date - at 47% Wednesday, available stocks comprise less than one day's worth of global nickel consumption.
Three-month lead edged back up towards its recent record high of $1,845/ton as strength spread across the entire complex.
Moreover, ongoing supply concerns at Xstrata's 161,000-ton Northfleet lead refinery in the U.K. further supported prices. Xstrata has temporarily restricted deliveries to Northfleet, which takes its feedstock from Mount Isa in Australia. Prices in dollar a metric ton.
3 Months Metal Bid-Ask Change from
Tuesday PM kerb
Copper 5790.0-5800.0 Up 70
Lead 1825.0-1826.0 Dn 5
Zinc 3350.0-3360.0 Up 25
Aluminum 2757.0-2758.0 Up 15
Nickel 39500.0-39505.0 Dn 300
Tin 13825.0-13850.0 Up 335
Aluminum Alloy 2200.0-2210.0 Unch
Aluminum Alloy 2170.0-2180.0 Up 10
Gold
BULLET: GOLD: Spiked to the $682.00 level after a slow climb.GOLD: Spiked to the $682.00 level after a slow steady climb to $673 accelerated, prompting a round of stop-driven buying through the $675/676 level that had capped the pair of late. One trader suspecting hedge fund demand behind the move after those names were sellers of the metal yesterday as it slid to lows near $655.00, now perhaps caugth wrong-footed.
Oil bounces
I mentioned last night that we would probably see a bounce in oil prices today as traders eye inventory data out a day later this week due to hol on Monday. Cold weather in the US last week has traders betting we will see big draws on distillates and nat gas supplies tomorrow. But we have seen this pattern over last few weeks..buying the rumour and selling the fact.. The cold weather acting as support is slowly unwinding. Wouldn't be surprised therefore to see oil come off after the reports tomorrow...
Will be interesting to see if oil can close over 60..technically this could put a new slant on things and send it higher short term
Will be interesting to see if oil can close over 60..technically this could put a new slant on things and send it higher short term
Oil
Oil edges up as traders expect lower US stocks in tomorrow's dataLONDON (AFX) - Oil rose, reversing earlier losses, as the market prepared for weekly US stocks data which is expected to show a drop in inventories.The Energy Information Administration will release the data tomorrow, a day later than usual as the US celebrated a national holiday on Monday. At 5.11 pm, front-month Brent North Sea crude contracts for April delivery were up 64 cents to 58.62 usd per barrel. Oil shed 16 cents to close at 57.98 usd yesterday.Meanwhile, front-month New York light sweet crude contracts for April delivery were up 46 cents to 59.31 usd a barrel, after falling 16 cents to close at 57.07 usd yesterday. "We had a pretty cold week last week," said Adam Sieminski, adding, "expectations for a gas draw are high."Gas prices are heading towards the highest level of this year.US/Iranian geopolitical concerns are also supporting prices.The UN had set a deadline of Wednesday for Iran to comply with its uranium enrichment programme, but "Tehran has all but scoffed at the idea," said Altavest trader, Tom Hartmann. "It appears that we could be seeing some buying due to Iranian posturing over its uranium enrichment programme," added Hartmann.However, gains were capped as demand looks set to fall on warmer temperatures. The US National Weather Service is forecasting temperatures in the US Northeast -- which consumes 80 pct of the nation's heating oil -- to stay above average levels through to March 5.While stocks last week are expected to have dropped, some analysts said the recent cold snap was not enough to overturn the growth in inventories as a result of a mostly mild winter.Prices in New York briefly dipped below the critical 50 usd level in mid-January as the US enjoyed an unusually warm winter.
Oil
Oil dips as expected warmer US weather set to curb demandLONDON (AFX) - Oil edged lower as warmer weather in the US is likely to curb demand.However, supply fears from Nigerian and Iran limited falls. At 9.23 am, front-month Brent North Sea crude contracts for April delivery were down 45 cents to 57.53 usd per barrel. Oil shed 16 cents to close at 57.98 usd yesterday.Meanwhile, front-month New York light sweet crude contracts for April delivery were down 49 cent to 58.32 usd a barrel, after falling 16 cents to close at 57.07 usd yesterday. "The onset of milder weather in the US, and expectations that more is on its way, have taken the top off oil prices," said Tobin Gorey, commodity strategist at the Commonwealth Bank of Australia.Prices have been consolidating since Friday's spike which lifted oil to over 59 usd after reports of violence in Nigeria sparked supply fears.Tensions over Iran's nuclear programmes are also preventing prices from dropping further.
LME INVENTORY LEVELS
Copper down 425 tonnes at 210,000 tonnes
Lead flat at 32,525 tonnes
Nickel down 468 tonnes at 3,930 tonnes
Aluminium up 6,450 tonnes at 779,675 tonnes
Tin flat at 9,995 tonnes
Zinc down 25 tonnes at 96,600 tonnes
Lead flat at 32,525 tonnes
Nickel down 468 tonnes at 3,930 tonnes
Aluminium up 6,450 tonnes at 779,675 tonnes
Tin flat at 9,995 tonnes
Zinc down 25 tonnes at 96,600 tonnes
Tuesday, February 20, 2007
LME REVIEW
LONDON (Dow Jones)--London Metal Exchange lead, nickel and tin surged to record highs Tuesday on fund buying driven by tight stocks and supply concerns, with further upside expected, traders said.
Bullish fundamentals triggered a wave of fund buying once the U.S. entered the markets that helped push the prices of nickel, lead and tin to record highs, an LME trader said.
A drop in LME nickel stocks by 36 metric tons to 4,398 tons Tuesday and a large cancelation in warrants helped push nickel to a fresh record high of $39,950/ton on electronic trade after the floor close, with traders expecting the $40,000/ton to be hit very shortly.
With canceled warrants - or material accounted for and to be drawn down at a later date - at 52% Tuesday, available stocks comprise less than one day's worth of global nickel consumption.
Elsewhere at the LME, three-month lead surged to a fresh record high of $1,845/ton on electronic trade after the floor close, triggered by declining stock levels and ongoing supply concerns at Xstrata's 161,000-ton Northfleet lead refinery in the U.K.
Xstrata said on Feb. 12 that it had temporarily restricted deliveries from its Northfleet lead refinery, which takes its feedstock from Mount Isa in Australia.
Three-month tin also hit a fresh record high of $13,500/ton due to ongoing supply concerns in Indonesia.
Last week, an Indonesian trade official said state-owned tin producer PT Timah Tbk. can no longer legally export tin, as it hasn't been reissued an export license under new regulations.
Indonesia recently shut down its private mining and smelting operations on Bangka island, where the country's largest tin reserve is located. Indonesia's PT Koba Tin - a key industry player - said recently that it's still allowed to mine and smelt tin from Bangka-Belitung province while it's under police investigation.
Industry sources say Koba, which produces around 24,000 tons of tin a year, is only shipping about 20% of its normal amount.
Meanwhile, aluminum fell 1% to a PM kerb of $2,742/ton from Monday as spreads eased and aluminum stocks rose 9,250 tons to 773,225 tons Tuesday. LME aluminum inventories have climbed roughly 10% since the start of 2007. Prices in dollar a metric ton.
3 Months Metal Bid-Ask Change from
Monday PM kerb
Copper 5720.0-5725.0 Dn 80
Lead 1830.0-1835.0 Up 55
Zinc 3325.0-3330.0 Dn 67
Aluminum 2742.0-2744.0 Dn 38
Nickel 39800.0-39850.0 Up 1100
Tin 13490.0-13495.0 Up 295
Aluminum Alloy 2200.0-2210.0 Up 10
Aluminum Alloy 2160.0-2170.0 Dn 10
Bullish fundamentals triggered a wave of fund buying once the U.S. entered the markets that helped push the prices of nickel, lead and tin to record highs, an LME trader said.
A drop in LME nickel stocks by 36 metric tons to 4,398 tons Tuesday and a large cancelation in warrants helped push nickel to a fresh record high of $39,950/ton on electronic trade after the floor close, with traders expecting the $40,000/ton to be hit very shortly.
With canceled warrants - or material accounted for and to be drawn down at a later date - at 52% Tuesday, available stocks comprise less than one day's worth of global nickel consumption.
Elsewhere at the LME, three-month lead surged to a fresh record high of $1,845/ton on electronic trade after the floor close, triggered by declining stock levels and ongoing supply concerns at Xstrata's 161,000-ton Northfleet lead refinery in the U.K.
Xstrata said on Feb. 12 that it had temporarily restricted deliveries from its Northfleet lead refinery, which takes its feedstock from Mount Isa in Australia.
Three-month tin also hit a fresh record high of $13,500/ton due to ongoing supply concerns in Indonesia.
Last week, an Indonesian trade official said state-owned tin producer PT Timah Tbk. can no longer legally export tin, as it hasn't been reissued an export license under new regulations.
Indonesia recently shut down its private mining and smelting operations on Bangka island, where the country's largest tin reserve is located. Indonesia's PT Koba Tin - a key industry player - said recently that it's still allowed to mine and smelt tin from Bangka-Belitung province while it's under police investigation.
Industry sources say Koba, which produces around 24,000 tons of tin a year, is only shipping about 20% of its normal amount.
Meanwhile, aluminum fell 1% to a PM kerb of $2,742/ton from Monday as spreads eased and aluminum stocks rose 9,250 tons to 773,225 tons Tuesday. LME aluminum inventories have climbed roughly 10% since the start of 2007. Prices in dollar a metric ton.
3 Months Metal Bid-Ask Change from
Monday PM kerb
Copper 5720.0-5725.0 Dn 80
Lead 1830.0-1835.0 Up 55
Zinc 3325.0-3330.0 Dn 67
Aluminum 2742.0-2744.0 Dn 38
Nickel 39800.0-39850.0 Up 1100
Tin 13490.0-13495.0 Up 295
Aluminum Alloy 2200.0-2210.0 Up 10
Aluminum Alloy 2160.0-2170.0 Dn 10
Oil
March WTI settles @ $58.07. Interesting to get the close over 58. Maybe a short term base here. May see moves higher tomorrow ..traders focus on inventories Thursday..Looking for those big draws in distillates and nat gas..Plus the news of Iran ..Don't you just love this volatility
Airtricity
Giant offshore wind farm gets the green light
By Susie Mesure
Published: 20 February 2007
The first British offshore wind farm to be built outside UK territorial waters was given the green light yesterday.
Airtricity, the Irish wind developer aiming to make Europe self-sufficient in energy, was awarded the 500-megawatt project, which will be built 16 miles off the Suffolk coast.
Eddie O'Connor, Airtricity's chief executive, said it would take two years to build the 150 sq km windfarm and he expects work to commence in 2009. Fluor, the US construction giant, is working with the Irish company on the £1.2bn project. The windfarm will be able to supply clean electricity to over 415,000 homes, more than all the demand in Suffolk.
The Greater Gabbard wind farm will be the first to be built outside the 12 nautical-mile boundary of UK waters. The 2004 Energy Act established a renewable energy zone that extended the Government's authority to 200 miles in some places.
Alistair Darling, the Trade and Industry Secretary, said: "We need more renewable energy as part of the mix of generation of electricity. It cuts emissions while powering homes."
Ian Pearson, the climate change minister, said wind farms such as Greater Gabbard "will play a major role in helping to reduce the UK's carbon dioxide emissions by 60 per cent by 2050".
He added: "We must start moving towards a zero-carbon economy now, which involves a significant increase in the uptake of clean technologies, especially renewable energy."
The 140-turbine wind farm will help to reduce carbon dioxide emissions by nearly 1.5 million tonnes a year - the equivalent of taking 350,000 cars off the road.
Mr O'Connor said he believes that eventually all of Europe's energy needs could be met by wind power.
"Wind is not just the North Sea oil and gas of the 21st century but its Saudi Arabia," he said. He wants Britain and Germany to pool their wind-powered electricity in a "supergrid ... that would provide infinite access to this treasure trove of energy".
He is flying to Berlin this week for meetings with the German government.
By Susie Mesure
Published: 20 February 2007
The first British offshore wind farm to be built outside UK territorial waters was given the green light yesterday.
Airtricity, the Irish wind developer aiming to make Europe self-sufficient in energy, was awarded the 500-megawatt project, which will be built 16 miles off the Suffolk coast.
Eddie O'Connor, Airtricity's chief executive, said it would take two years to build the 150 sq km windfarm and he expects work to commence in 2009. Fluor, the US construction giant, is working with the Irish company on the £1.2bn project. The windfarm will be able to supply clean electricity to over 415,000 homes, more than all the demand in Suffolk.
The Greater Gabbard wind farm will be the first to be built outside the 12 nautical-mile boundary of UK waters. The 2004 Energy Act established a renewable energy zone that extended the Government's authority to 200 miles in some places.
Alistair Darling, the Trade and Industry Secretary, said: "We need more renewable energy as part of the mix of generation of electricity. It cuts emissions while powering homes."
Ian Pearson, the climate change minister, said wind farms such as Greater Gabbard "will play a major role in helping to reduce the UK's carbon dioxide emissions by 60 per cent by 2050".
He added: "We must start moving towards a zero-carbon economy now, which involves a significant increase in the uptake of clean technologies, especially renewable energy."
The 140-turbine wind farm will help to reduce carbon dioxide emissions by nearly 1.5 million tonnes a year - the equivalent of taking 350,000 cars off the road.
Mr O'Connor said he believes that eventually all of Europe's energy needs could be met by wind power.
"Wind is not just the North Sea oil and gas of the 21st century but its Saudi Arabia," he said. He wants Britain and Germany to pool their wind-powered electricity in a "supergrid ... that would provide infinite access to this treasure trove of energy".
He is flying to Berlin this week for meetings with the German government.
Oil
Oil falls on expectations US temperatures will moderateLONDON (AFX) - Oil fell on expectations temperatures in the US Northeast are set to moderate, decreasing heating oil demand.At 3.27 pm, front-month Brent North Sea crude contracts for April delivery were down 88 cents to 57.26 usd per barrel. The contracts dipped 81 cents to close at 58.14 usd yesterday.Meanwhile, front-month New York light sweet crude contracts for March delivery, which expire later today, were trading at 57.71 usd a barrel, down 1.66 usd from Friday's close. NYMEX did not issue a settlement price yesterday as US markets were closed for the Presidents Day holiday."Prices have pulled back significantly, particularly heating oil, as weather remains the primary focus," said Fimat analyst Mike Fitzpatrick.He added as the winter draws to a close amid still healthy inventory levels, and as economic signals from the US remain mixed, prices will struggle to hold near 60 usd per barrel this week. Weather forecasters have said the cold in the US Northeast, the world's largest heating oil market, should ease this week. Forecasts aside, the winter is, in any case, drawing to a close, analysts note.As a result, the market's attention is fast turning to the US summer driving season, when demand for gasoline typically surges.Jim Ritterbusch, President of Ritterbusch & Associates, this week's US inventory data might support of oil prices, especially if it shows a decline in refinery operating rates or gasoline production capacity.The data is being released on Thursday, a day later than usual on account of the Presidents' Day holiday Monday.Oil could also find some support this weak from geo-political tensions with Iran, as the UN Security Council's deadline for Iran to halt sensitive uranium enrichment work expires Friday.Uranium is used to fuel for civilian reactors but can also produce atom bomb material. Iran's president Mahmoud Ahmadinejad has said his country will not halt nuclear fuel work as a precondition to UN talks. "There is certainly some concern western leaders will tighten sanctions" after Friday's deadline expires, said Fitzpatrick.Oil prices were steady earlier in the session, supported by concerns over possible supply disruptions in Nigeria, where three European oil workers were kidnapped late Sunday."Yesterday, there was news of further kidnappings of oil workers and with presidential elections coming up in April, many believe that the situation can only get worse before it gets better," said Sucden analyst, Michael Davies.Also supporting prices were worries over potential supply glitches from a fire which halted operations at Valero Energy in Texas over the weekend. Valero oil refinery processes 158,000 bpd.
TLW
20.02.2007 Investors Keen To Hear Test Results From Heritage Oil Corp’s Kingfisher-1A Well Canada’s Heritage Oil Corp has gladdened the heart of investors with news that it is preparing to production test the deeper intervals of the Kingfisher-1A well in Uganda. The well, drilled to a total depth of 3,195 metres, has already successfully flowed oil, pumping over 4,000 barrels per day from an 10 metre thick interval 1,783 metres down. That was a good result, exceeding company expectations, but success in the deeper zones could put Kingfisher in a different league. The first production test was back in November. Since then the well has been sidetracked to probe the deeper primary objective. The Toronto-listed firm, which is presenting at this week’s oilbarrel.com conference in London, and its 50/50 partner Tullow Oil plan to test three intervals with a total thickness of 44 metres between 2,260 and 2,367 metres, with the thickest interval measuring 21 metres. This sounds promising and success here could put Kingfisher, which has an areal extent of around 70 sq km, in a different league. It’s not all been plain sailing, however. The well has made slow progress from November, reaching 2,962 metres in mid-January and taking another month to dig another 250 metres before stopping well short of the targeted total depth of 4,000 metres. It appears the limitations of the rig have hampered progress and obscured the potential of this well: the November production test, for example, was constrained by the rig, with Heritage estimating it could have flowed 5,600 barrels per day with the right equipment. This is frustrating for investors but not uncommon when drilling in remote and untested areas when it can be difficult - and expensive - to access resources. Investors now have to wait up to three months for the results of the test programme and to find out by just how much Kingfisher will enhance the Albertine Basin’s prospectivity. Last year Heritage’s CEO Tony Buckingham said the basin “looks increasingly like it has the elements to make it a world-class petroleum basin”. There is still a long way to go, however. Further drilling will be required to really get to grips with the resource potential here and to answer questions about the waxy nature of the crude. Tullow Oil, which last year acquired Hardman Resources for US$1.1 billion to secure 100 per cent of Block 2, home to the Waraga, Mputa and Nzizi discoveries, is keen to get the drillbit to work to find sufficient reserves to justify a pipeline to the coast. In the wake of the Nzizi-1 well - a slimhole well which encountered good oil shows over a gross interval of around 180 metres but was not tested - Tullow said it believed there was scope to significantly increase the previous recoverable volume (around 30 million barrels) in the Mputa/Waraga area. Tullow and Heritage now dominate this play, holding 50 per cent each of blocks 1 and 3A in Uganda and also taking on Blocks 1 and 2 in the east of the Democratic Republic of Congo, on the border with Uganda in the Lake Albert region. Tullow also holds 100 per cent of Block 2 in Uganda. This gives the companies a real understanding of the basin-wide geology, not to mention a material stake in what is shaping up to be a very interesting play.
LME INVENTORY LEVELS
Copper down 650 tonnes at 210,425 tonnes
Lead up 50 tonnes at 32,525 tonnes
Nickel down 36 tonnes at 4,398 tonnes
Aluminium up 8,250 tonnes at 773,225 tonnes
Tin down 85 tonnes at 9,995 tonnes
Zinc down 50 tonnes at 96,625 tonnes
Lead up 50 tonnes at 32,525 tonnes
Nickel down 36 tonnes at 4,398 tonnes
Aluminium up 8,250 tonnes at 773,225 tonnes
Tin down 85 tonnes at 9,995 tonnes
Zinc down 50 tonnes at 96,625 tonnes
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