Oil on the moveFont Size: Decrease Increase Print Page: Print Robin Bromby | June 30, 2009 Article from: The Australian DON'T ask us to explain it, but an attack on an oil platform in Nigeria sent oil to $US72.29 a barrel by the New York close.
According to reports, Wall Street read the rising oil price as a sign that the US economy was showing signs of strength, and so bid up stock prices. The previous day, there were reports that bowser prices in the US were falling, which was unusual given that a long holiday weekend is coming up with many Americans taking to the roads.
Looking at the big picture, there has been curiously little concern about the rising price of oil and the potential repercussions for economic growth. After last year’s record prices, perhaps $US70/barrel looks benign.
There are still a few big potential plays - Cuba is at long last allowing foreign oil companies to drill its part of the Gulf of Mexico - but, long term, the demand and supply lines are going to cross each other going in opposite directions.
Like gold and uranium, oil should be on investor horizons.
Among the latest news releases, three partners in a US oilfield - Golden Gate Petroleum with 33.25 per cent, Modena Resources with 15 per cent and Quest Petroleum holding 5 per cent - report their Jumonville-2 well is producing at the rate of 750 barrels of oil a day plus 250,000 cubic feet of gas. In the first quarter of 2009, Jumonville-1 pumped 38,687 barrels of oil and 19.5 million cubic feet of gas
One largely overlooked company is Singapore-based Interra Resources which is dual listed here. Its March quarterly showed its share of oil production for the three months was 33,669 barrels of oil from Burma and 37,927 barrels from Indonesia. This company holds the two largest of Burma’s historic oil fields and has announced an interesting drill program at one of those, Chauk. The well is intended to reach oil that cannot be recovered by existing production wells; it will go down just over 900m and then be deviated to drill horizontally into the reservoir.
And then there’s WHL Energy which floated as Wind Hydrogen. There’s a board stoush going on which may or may not be settled at a shareholder meeting this Friday. But the company is now taking an interest in fossil fuels as well as renewables, and has just taken a one-third stake in a Kentucky venture. One of the partners is Canadian listed KOS Energy which uses short radius stimulation drilling. The partners will own 138 oil wells and use the technology to lift output eventually by an additional 500 barrels a day.
GGP Price at posting:
6.3¢ Sentiment: Hold Disclosure: Held
