Oil Price- Capitulation?
All eyes and ears are now on the physical traders who tell me that yesterday was pretty grim, any short covering done late on Tuesday was forgotten when big sellers came into the market in London and then again in New York. The phrase my guy used was that the producers had ‘thrown in the towel’ and were not going to fight the trend.
Now followers of mine will know that I like a bit of throwing in the towel, or capitulation as we call it, there may well be a bit more downside but if you feel that it’s a bit grim out there it may be the darkest hour just before dawn!
BP
It seems as if the final day of the first phase of this trial was yesterday and that the case hinges on the responsibility for the pressure test that turned out not to be secure. All the charges of gross negligence against BP and its employees rest on the Judge’s assessment of the evidence presented.
It is interesting to note that despite the company buying back its own shares, recently at around 6m per day, the stock price continues to fall. In our view the buyback is the only thing that might keep the shares afloat unless they were to receive a favourable judgement in the courtroom in New Orleans.
BP 2 Year chart
Soco
Confirmation today that Soco has, with only minor modifications, managed to increase production from the TGT field in Vietnam. After further modifications are made to the FPSO it is expected that it should be able to handle volumes of around 70,000 bopd. We remain very positive about Soco, a company with strength and strong cash resources that will be able to cope well at a time when other E&P stocks might be feeling the pinch.
Soco International 1 Year chart
Tullow/Northern/Wessex/Shell
Not happy is the goss from Toolow about the unapproved release of the French Guiana Priodontes well, the larger members of the syndicate wanted to wait until TD, the others we suspect wanted to try and put some lipstick on the pig.
My positive stance on T is hung out to dry at the moment, I promise I will cut it if I think I am wrong but feel that the Spring deal is a very good one and it will turn out right in the end.
Kind regards
Malcolm
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