HYDROCARBONS DAILY RECORD: FRIDAY, 29 SEPTEMBER 2006

By J. Brock (FINN)

At 1800 LMT Friday, 29 September 2006 Light Sweet Crude fell 76 Cents to stand at $62.01 and Brent Crude dropped $1.12 Cents to stand at $61.42.

TRENDS

OPEC’s decision not to hold an emergency meeting to cut production has helped to lower the price of crude today.  Speculation that crude prices are falling due to the up coming election in the United States is inaccurate and recent drops in the price are because of the OPEC announcement.  Supplies of crude, gasoline and winter heating fuel in the United States have also been responsible for the price drop. 

THE MARKETS

FTSE

At the close of play today, the FTSE 100 was down 10.54 points to settle 5,960.80 and the FTSE 250 gained 18.63 points to end at 9,9796.80.  FTSE Small Cap closed up 14.33 points to settle at 3,541.90.

DOW JONES AND NASDAQ

Analysts describe the DJI as flirting with the highest close ever but at the close of trading today the index was down.  They further say that the highest ever point is a psychological benchmark and that satisfaction can be drawn from the fact that Wall Street has enjoyed the best performance this quarter than it has in nine years.

At the end of play today the Dow Jones Index was down 39.38 points or 0.34% to settle at 11,718.45 and the NASDAQ lost 11.59 points or 0.51% to settle at 2,258.43.

DEVELOPING REGIONAL FACTORS

Lawyers hired by Ecuador to represent the country in an arbitration case with U.S.-based Occidental Petroleum Company (OXY) have resigned.   The lawyers notified Ecuador’s Attorney General Jose Maria Borja of their decision last Friday.  Ecuador’s government hasn't announced when it will name a new legal team to defend the state in the World Bank's International Center for the Settlement of Investment Disputes, or ICSID, where Occidental filed its claim.

(Venezuela and Bolivia)

Petróleos de Venezuela (Pdvsa), a state-run holding, wants to join Bolivia’s state-run  Yacimientos Petrolíferos Fiscales Bolivianos (YPBF) in a joint venture for exploration and exploitation of hydrocarbons in Bolivia.  Pdvsa wants to take part in exploration of blocs  north of La Paz, and both countries soon  could announce the beginning of formal steps to work on these fields, according to Bolivian state agency ABI, DPA.  If the agreement for exploration works in La Paz is workable, both state companies would negotiate a joint venture, with YPFB having the major stake, possibly 51%.

(Falkland Islands)

Though it may seem discouraging to see share prices drop it is all in a good cause.  With higher prices oil rigs are difficult to acquire.  However, demand for rigs could lower right along with the prices and one finally could be taken to the Falklands to explore the North Falkland Basin for Desire Petroleum.  We still don’t know about a rig because Desire is still playing their cards close to the chest.

The South Falkland Basin is in deeper water and a ship, rather than a rig would be needed to explore there.  Again, none of the Exploration Companies are talking because it’s too early since the crude price drops to schedule a ship.

Share prices at the close of play on Friday, 29 September 2006

Desire Petroleum Plc ended down 0.25 points or 0.69% on the day to settle at 35.75.

Falkland Oil and Gas Limited (FOGL) were down 6.50 or 7.43% on the day to stand at 81.00.

Rockhopper Exploration ended unchanged on the day to settle at 40.00.

Borders & Southern ended up 1.50 points or 3.75% on the day to stand at 41.50

Tullow Oil ended down 1.25 points or 0.33% to stand at 377.00