Having just looked at POO now at $68.25, I have to say that this...

Having just looked at POO now at $68.25, I have to say that this EU crisis has come at a bad time for us NDOers but what it has done in reality is bring back fundamentals to the oil market, ie the old basic principle of supply and demand. Those of us with too much time on our hands or maybe just me would realise from indepth analysis of the weekly EIA reports in the US that their crude and finished product inventories have been risinng for something like the past 17 weeks (with one week of decrease in there somewhere from memory). Now with bullish stock markets this has been largely over looked BUT now the wheels have changed and fundamentals are coming home to roost. What also has occured during this period is OPEC's quota compliance has decreased to 54%. In other words they have literally opened up the taps and pumped in more oil than current demand requires which may have been in an effort to actually keep the POO under control from overheating, which as we know would be bad for world economic recovery. It is a finely balanced act between "controlling" the POO at a level to stimulate investment and to not dampen economic recovery, but seemingly as we speak the theory of peak oil appears flawed as their is over supply occurring weekly AND unutilised capacity. For us NDOers what is the impact. Well for those that remember I posted a financial analysis of QTR production and cashflow with Tind online and sensitivity to POO. In a nutshell IF and thats IF Tindalo can flow at 10K BOPD and Galoc the same for the first QTR then at $85 POO we would have pocketed a cool $32m in cash profit for the QTR. At $70 POO this reduces to a respectable $23m and at $65 POO a still healthy $20m. IF Tindalo was to only flow at 7 K BOPD then at $70 POO we are looking at $12m cash profit which would have to be a little disappointing i would have thought. Moral of story for me is we really need 10 k BOPD for intial flow rates at least and for US crude inventories to stop rising to make our Tindalo story one of happiness. If the powers to be keep building US crude week on week POO will only head one way. US crude figures relased tonight and on the back of a possible red night in EU and US if we get another build look for POO at $65. Food for thought and I stand to be corrected on all of this as it is my opinion only!!!