14th December 2016
There is never a dull moment...
Right now in the oil market there is never a dull moment.
Over last weekend non-OPEC countries agreed to productions cuts in principle, which boosted prices again.
Yet last night the American Petroleum Institute (API) reported a surprise build to US stockpiles by a further 4.68 million barrels. "This is a direct result of a new rig coming back online virtually every week over the last few months" says Bill Baruch of II Trader. Strangely though, Bill is still bullish predicting a price of $58.97 by the end of the year.
So what's going on? Shearwater GeoServices takes the view that the real story will emerge in the first few weeks of next year when global statistics show the impact of the OPEC and non-OPEC actions to reduce worldwide production. Will we find they have been true to their word or will supply still be out-stripping demand? Here at Shearwater we take the positive view that whatever the oil market does it will soon be time for exploration to get going again. If demand for oil begins to increase when supplies are reducing then there could be a new danger of a higher volatile price. No one wants this so a steady exploration program will help to keep the market in check. At Shearwater we are well dimensioned to keep on with our existing work rate and take full advantage when the situation improves.
Written by John Iliffe, HR Manager