Today’s Blog – Monday 6th March 2017

Editorial

Australia’s Pauline Hanson has recently trammelled some Trump/Le Pen/etc-lite opinions  – by expressing some enthusiasm for Vladimir Putin, saying:

“Even the people here in Australia were saying, ‘I wish we had a leader like that here, I wish someone would stand up and fight for this country'”.

Last week we noted a report that Mr Putin was deserving of some admiration in one quarter at least – he was said to be the richest man in the World, with a fortune of US$200B – largely in stakes in oil and gas companies, as well as the usual array of US$1B palaces, etc.   We wish we had his financial adviser – he has done well converting his annual salary of U$140,000 into these assets to look after him in his dotage.

His thieving abilities are clearly impressive, but given that the fleeced are his people of Russia, we are not sure that we are amongst the people of Australia wishing we had a leader like that.

Putin must currently be richer in real terms than John D Rockefeller was at his peak – and therefore is arguably the most financially successful oil-man ever.

Commodity prices

Crude traded up ~1.5% on Friday, with Brent closing at US$55.90 and WTI at US$53.33 (although over the course of the week, prices were essentially flat. Again).  Stories of strong OPEC compliance were the key driver of the day.

Friday’s weekly BHI rig count showed growth of 7 oil rigs and a fall of 5 gas rigs.

News from Libya about a rebel group (aren’t they all rebel groups?) taking over a port indicated that country’s recent large production increases could reverse.

Henry Hub was up nearly 1% on Friday at US$2.83 – it was up a similar amount for the week.

LNG and international gas

As measured by the Singapore Sling index, the price of spot LNG in Asia has recently declined below US$6/mmbtu.  This follows higher prices of nearly US$10 seen in the cold winter just experienced in the Western Pacific – the arrival into a warmer shoulder period has quickly loosened the market.

This compares with a news story in the Australian Financial Review (AFR) today of prices as high as A$20 recently being offered to desperate industrial buyers.

Disruption

The rise and rise of solar power continues – with the Saudis looking to spend US$Bs in the area – starting with a tender for a 300 MW plant in a few month’s time.  Sun, space – and a reasonable credit rating – are all in abundance in the KSA.

Interest in the area was recently captured well by a quote from recently retired long time Saudi Energy Minister, al-Naimi:

“As far as oil prices and oil, I have left that behind.  Now I’m much more interested in solar energy, making solar panels.”

Company news – 88E 

Alaskan focused 88E (for those not familiar with it – a lucky name in Chinese) has recently demonstrated that there is market support for exploration out there – it has just closed an over-subscribed placement to raise A$17M.  This will fund an imminent well due to spud next month.

Alaska has been a hot spot for conventional discoveries in the last year.  If Trump and Congress open up part of the Alaska Natural Wildlife Reserve (ANWR) next door to 88E’s leases – then interest in the State will likely greatly increase.

Quote of the day

A quote from Russian politician Igor Lebedev about a proposed new sport – organised football hooliganism (which we suspect will be introduced informally anyway in Russia during the next election – err, we mean World Cup):

“Russia would be a pioneer in a new sport.  English fans arrive, for example, and start picking fights. And they get the answer — challenge accepted. A meeting in a stadium at a set time.”

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