Falklands : Hydrocarbons Daily Record (11/10/06)
Submitted by Falkland Islands News Network (Juanita Brock) 12.10.2006 (Article Archived on 26.10.2006)
OPEC's consensus has not stopped the decline in crude prices.
HYDROCARBONS DAILY RECORD: WEDNESDAY, 11 OCTOBER 2006
By J. Brock (FINN)
At 1800 LMT Wednesday, 11 October 2006 Light Sweet Crude fell .93 Cents to stand at $57.59 on the New York Mercantile Exchange and Brent Crude fell .69 Cents to stand at $58.65 on London’s ICE Futures Exchange.
TRENDS
It looks as if OPEC’s consensus has not affected the price of crude as they had expected. Prices continue to fall and one could wonder if this is a back-lash against the artificially high prices attained last July during the Mid-east crisis. It is thought that even $60.00 crude is too expensive.
THE MARKETS
FTSE
At the close of play today, the FTSE 100 was up 0.81 points to settle 6,073.50 and the FTSE 250 gained 2.62 to end at 10,247.10. FTSE Small Cap closed down 6.39 points to settle at 3,593.00.
DOW JONES AND NASDAQ
A driving factor for the decline on Wall Street today was the weaker than expected profit attained by Alcoa Inc – a smelter and distributor of aluminium products. Minutes form the last Federal Reserve Bank meeting provoked worry about the economy. Approximately 1.5 hours before the stock exchange closed a single engine plane crashed into a 50 story apartment block in New York’s Upper East Side. The market fluctuated but regained some points after it was discovered the crash was an accident and not terrorism.
At the end of play today the Dow Jones Index lost 15.04 points or 0.13% to settle at 11,852.13 and the NASDAQ lost 7.16 points or 0.31% to settle at 2,308.27
DEVELOPING FACTORS
(OPEC)
Edmund Daukoru, President of the Organization of the Petroleum Exporting Countries, said the cartel's 11 nations have agreed to cut production by a combined million barrels per day (bpd) from November. The cut of one million bpd has received consensus and that all eleven members have agreed. But the OPEC secretariat in Vienna would not immediately confirm that an accord had been struck.
(Uganda)
Tullow Oil and Hardman Resources, joint partners in Block 2 in Uganda, have signed a memorandum of understanding relating to future investment plans with the country's government.
DEVELOPING REGIONAL FACTORS
(Falkland Islands)
ARE NATURAL GAS RESERVES A GOOD RESOURCE?
An Editorial by J. Brock (FINN)
Just after the first round of hydrocarbons exploration ended in the North Falkland Basin there were indications of disappointment that some reserves of natural gas were found. Later in the South Falkland Basin gas chimneys were discovered but the later discovery was seen to be a more positive indicator than the discoveries in 1997/1998.
Prior to the fine tuning of mechanisms in liquefying natural gas to make it a viable resource, it was seen as a less profitable discovery, given the price of crude at the time - $10.00 per barrel, so natural gas was not seen as viable as crude.
With methods to liquefy natural gas and turn it into sulphur-free diesel there is value in finding natural gas and a ready market for the product. With developments in gas to liquid plants it is possible to put more sophisticated equipment aboard drilling ships with greater capacity than they have now, bringing a cost-effective supply of high quality diesel to more remote markets, as well as major ones that are on the supply route.
With improving technology natural gas can be an important discovery and well worth watching by investors.
Share prices at the close of play on Wednesday, 11 October 2006
Desire Petroleum Plc ended up 1.25 points or 3.88% on the day to settle at 33.50.
Falkland Oil and Gas Limited (FOGL) ended up 1.00 points or 1.18% on the day to stand at 86.00.
Rockhopper Exploration ended unchanged on the day to settle at 39.50.
Borders & Southern ended down 0.50 points or 1.32% on the day to stand at 37.50
Tullow Oil ended down 4.75 points or 1.21% to stand at 386.25
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