WTI (Sep) $79.38 -$1.61, Brent (Oct) $83.45 -$1.44, Diff -$4.07 +17c
USNG (Sep) $2.59 -6c, UKNG (Sep) 91.9p -10.82p, TTF (Sep) €37.645 -€0.49.

Oil price

With Chinese data a bit mixed the hedgies have got bored after a rally in crude that has lasted for longer than any of them might have guessed, there’s no doubt that recovery in the East is taking its time. Also the Fed minutes showed that inflation is still a worry so like the BoE they probably have another raise in them.

Inventory stocks were good, the crude draw was 5.96m barrels much bigger than expected which was due to refinery runs being right up to 94.7%, a very high figure for the summer when maintenance is happening but refining margins are high and they are making out whilst the sun shines.

Genel Energy

Genel Energy  notes that DNO ASA, as operator of the Tawke PSC (Genel 25% working interest), has today issued an update on licence activity.

Following a four-month shut-in triggered by the closure of the Iraq-Turkey Pipeline export route, DNO has partially restarted operations at the Tawke field and is currently selling its entitlement share of oil production to local trading companies.

DNO restarted partial oil production from the Tawke field to conduct well integrity and reservoir tests but has continued to produce to meet strong demand for Tawke oil.

Tawke output is currently averaging around 40,000 bopd, of which one-half is delivered to the Kurdistan Regional Government as its entitlement and the balance is sold to local trading companies.

Prices vary by contract and average just over 50 percent of pre-closure levels but payments now are made in advance and directly to the operator.

Oil is transported by buyers from the DNO terminal with road tankers.

The Peshkabir field, also within the Tawke licence, remains shut-in.

It is good for Genel to have some positive news from Kurdistan where DNO has, after reopening to check all was OK, found that it was and that local traders were flocking around to buy some 20/- b/d. As can be seen above prices are at a discount but are paid in cash and in advance which has a nice feel about it. 

It’s like the old days at Tawke as the tankers collect the off-take from the field and whilst it’s not Christmas it is better than the proverbial sharp stick and such revenue is very welcome and probably covers G&A costs to a large degree. 

At 80p this is no time to jettison Genel and although there is no sign yet of peace on the pipeline front I still believe it would be ridiculous for it to remain shut and therefore Genel will have significant further upside for the patient investor.

KeyFacts Energy Industry Directory: Malcy's Blog