The Pay Zone: Oil Price Falcon Oil & Gas and Finally....

WTI $58.14 -99c, Brent $62.69 -62c, Diff $4.55 +37c, NG $2.70 +11c
Oil price
Its a very quiet day so a very short blog this morning. The oil price dipped yesterday and it would have been worse if it hadnt been for a weak greenback which cushioned the fall. The problem this time was weak economic figures from China where consumer inflation data was worse than expected coming in at 1.2% only in May giving way to worries about the state of demand. Added to that the oil import figure looked very odd in May coming in down 26% on April’s number of 7.37m b/d at 5.47m b/d. Part of this will be seasonal refinery maintenance and partly some drawing from stock but that could not account for such a big fall in demand. I would normally say that this is a rogue figure especially given the recent run of strong demand for imported oil but worth keeping an eye on.
Tonight sees the API inventory stats and after last week when they were a different sign to the EIA numbers analysts are hoping that things even up with a stock draw, if not the market will be edgy ahead of tomorrows numbers. EIA figures also show that US production remains at or close to record numbers at 9.59m b/d…
Falcon Oil & Gas (LON:FOG)
All of a sudden there is a lot going on at Falcon, after I interviewed CEO Philip O’Quigley on TipTV the week before last there is activity in both its key areas. Last week it was Australia where drilling operations got under way and this week it is good news from South Africa. I understand that the Government there has Gazetted new fraccing regulations for the oil and gas industry. Publication of these means that exploration licences for shale gas can be issued to those companies that applied in the past. I take this to be good news for Falcon who have had an application in for a 7.5m acre permit in the Karoo Basin, a farm-out would probably follow, maybe to technical partner Chevron but i’m sure there will be plenty of interest in this asset.
And finally…
Quiet also on the sporting front but THIFA is still in the news with that charming gentleman from Trinidad facing even more horrendous allegations, not stopping anytime soon this show…
The England team at the Womens World Cup start their campaign tonight against France who are highly rated in the competition.
And back to cricket as the One Day series against the Kiwis starts today at Edgebaston, at least selectors have ditched the remaining old fogies so now its time to give a chance to some young blood…