Malcolm Graham-Wood
Independent Analyst
So, the removal of sanctions happened slightly faster than expected and the oil price duly fell again on Friday. That fall meant that WTI was down $3.74 on the week and Brent $4.99, with a fall of 20%+ over the fortnight the sector has been hard hit by Iran and China to name but two. Product prices have not been far behind also falling in the high teens %age. Quite how much Iran can produce and when is still a moot point, I will stick with around 300/- b/d before long but the ramp up to another 1m b/d could well take as much as another year. What is not up for discussion is that the market is not in a good position to absorb it at the moment, today’s fall to $29.12 for WTI and $28.67 for Brent might have been worse and still could be. Martin Luther King day in the US so not everybody is at work so let’s assume it will get weaker before any signs of strength.
It is of course Davos week and long standing readers will know my views on showboating in the snow by CEO’s and politicians. It is worth tracking the share prices of those companies that spend a small fortune being there, it doesnt look good. Take for example an investment house in Dundee who should have stayed at home rather than rubbing shoulders with the rich and famous on the slopes…
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