Falklands : Hydrocarbons Weekend Record: 15 to 17 December 2006
Submitted by Falkland Islands News Network (Juanita Brock) 18.12.2006 (Article Archived on 01.01.2007)
Geopolitics and the OPEC decision to further cut production were major factors in the increase of crude prices last week.
HYDROCARBONS WEEKEND RECORD: FRIDAY, 15 TO SUNDAY, 17 DECEMBER 2006
By J. Brock (FINN)
LAST WEEK’S CRUDE PRICES:
Monday, 11: Light Sweet Crude $61.22 Brent Crude $61.84
Tuesday, 12: $61.02 $61.52
Wednesday, 13: $61.37 $61.80
Thursday, 14: $62.51 $62.02
Friday, 15: $63.00 $63.30
Monday, 11: Investors are waiting to hear about the FED and interest rates. There are also some doubts about whether OPEC will decide to cut production at their next meeting on 14 December.
Tuesday, 12: Investors are not impressed with the FED’s decision not to change interest rates this time around. They are still waiting to see if OPEC are going to cut production. Warmer US weather also figured into the lower crude price today.
Wednesday, 13: Investors were nervous about the world-wide supply of hydrocarbons products as well as the heavy demand for heating oil in the northern winter. There were also worries about whether OPEC will cut production. The meeting is on Thursday.
Thursday, 14: OPEC’s decision to cut production by approximately 500,000 barrels a day has caused the price of crude to rise today. As for those cuts, there are a few factors that will give hope for investors. The most recent cut is not due until February 2007. It may not be implemented if crude prices stay above £60.00 a barrel. Thus far OPEC has increased production and the increase has swallowed up the current production cut of 1.2 million bpd. Consumers are the ultimate losers when crude prices go too high and there is a move afoot to switch to alternative fuels. Lessons were learned last northern summer when there was genuine pain at the pump. I am sure that they do not want to suffer the same in 2007.
WEEKEND DEVELOPING REGIONAL FACTORS
In a confusing scenario, Bolivia’s government denied on Sunday that the head of state-owned oil company YPFB, Juan Carlos Ortiz, had resigned. The reports were published in La Prensa newspaper on Saturday. The report continues that Ortiz had stepped down due to lack of support from the government and even published a copy of the resignation letter. Bolivia’s Energy Minister Carlos Villegas said in a press conference on Saturday night that Ortiz "never presented his resignation" from the presidency of YPFB, Sr. Villegas said Ortiz met with President Evo Morales and Vice President Alvaro Garcia Linera late on Saturday and denied that he ever submitted his resignation at that time. This is a developing story and will be monitored.
US Oil Company, Chevron has announced that it will shoot 3D seismic in January 2007 at the Cardon III acreage offshore from Venezuela. According to the announcement pre-planning is going well. Chevron was awarded the block in October 2005 after a bid of 5.6 Million USD.
RELEVANT SHARE PRICES
Monday, 11: DES 36.50, FOGL 82.00, RKH 40.50, BDR 39.75, TUL 409.00
Tuesday, 12: DES 35.00, FOGL 85.00, RKH 40.00, BDR 39.75, TUL 405.00
Wednesday, 13: DES 35.75, FOGL 84.50, RKH 40.00 BDR 40.00 TUL 403.00
Thursday, 14: DES 35.75, FOGL 84.50, RKH 40.50, BDR 40.00, TUL 403.25
Friday, 15: DES 35.75, FOGL 84.50, RKH 40.00, BDR 40.00, TUL 405.00