Malcolm Graham-Wood
Independent Analyst
Its squeaky bum time in the oil industry as the crude price has fallen every day since the Opec meeting giving the bears so much to write about. Fundamentally of course they are still correct with so much oil around and no sign of any end to the overflow. Add to that the Paris agreement and you get a healthy dose of liberal politics into the process as the end of fossil fuels is deemed to be in sight. Last night the BBC managed to find (funny how they have these people in their Rolodex) a commentator who said, all it really needs is to cut out coal and shale gas and close down the North Sea oil and gas industry to achieve our goals.
Well it may not come to that as I couldnt help noticing that almost all the people at the Paris conference were in possession of tablets and phones in abundance, indeed you could almost feel the fossil fuel powered adrenaline rush…
Back to basics and the rig count which gave the oil price a modest but much needed rally on Friday afternoon. Overall rigs were down 28 units to 709 and with oil down 21 at 254 we had the biggest fall since April and a 66% fall y/y. Now this isnt any sign of imminent US production falling , nor should people clutch at straws but at these levels a lot of discretionary production will come off the market, if it gets worse, which it looks likely too there will be more and not just in the USA. It is also worth noting that Natural Gas is now trading at a low, having fallen through $2 on Friday with no sign of cold weather yet, oil of course is getting very close to the December 2008 lows…
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