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IEA revises its global oil demand
outlook lower
Energy Market Indices WoW Changes
⇒ S&P/TSX Energy Index: -2.2%
⇒ S&P 500 E&P Index: -1.0%
⇒ Oil Service Sector Index: +0.6%
⇒ UK FTSE Oil & Gas Producers Index: -3.8%
⇒ Asia Pacific Oil & Gas Producers Index: 0%
Weekly Market Recap
WTI oil futures recovered last Friday to US$99.65/bbl (up 2.5% WoW) in the face of
bearish demand indicators last week. The IEA revised its 2011 global oil demand
growth forecast lower to +1.3mmbbl/d (down 190mbbl/d) on the IMF’s weaker
economic outlook for the OECD. Estimated oil product demand is 89.2mmbbl/d for
this year. On Wednesday, the DOE showed storage builds for crude oil of
+3.8mmbbl (vs. +1.5mmbbl consensus) and gasoline of +1.3mmbbl (vs. draw of
0.8mmbbl consensus). Also, the People’s Bank of China raised its banks’ reserve
requirement ratio to combat inflation after the rate was reported at 5.3% in April.
Concerns that the Mississippi River Valley flooding will disrupt US refineries lifted oil
prices late in the week.
In Europe, we initiated coverage on Cove Energy (COV LN) with an Outperform
rating and a 150p target price. Our analysis implies Cove is trading at a 30%
discount to Core NAV. We also published an E&P sector report, titled Searching for
Upside, that provided our estimates adjusted for FY2010 and drilling results to-date.
It was a busy week on the news front. On the Integrated side, BP took steps forward
in trying to resolve the dispute with AAR regarding BP's Arctic Alliance with Rosneft.
The share swap agreement with Rosneft is due to expire on Monday. BG reported
disappointing 1Q11 results due primarily to a miss in production volumes (9% below
our estimate) and guided to modest growth in 2011. OMV reported a 1Q11 net
income 4% below consensus and 6% below our estimate, and guided down 2011
production volumes. Repsol reported robust 1Q11 earnings (19% ahead of
consensus) driven by strong divisional results in LNG, YPF and Downstream.
On the E&P side, DNO reported first signs of export payments in Kurdistan as well
as 1Q11 results showing strong production, but lower than expected net income.
Hardy announced that it expects to drill a third exploration well by the end of 2Q11
on the D9 Block and a fourth exploration well is expected by the end of 2011 (two
exploration wells to-date in the D9 have been unsuccessful). Tullow reported
production in line with expectations and announced that its Uganda farm-in
completion is still a few weeks away. Max Petroleum announced that the ASK-1 well
in the Asanketken prospect on Block E has not yet reached TD due to mechanical
problems and that it started drilling the NARS-1 exploration well at Narmundanak
South on Block E.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
IEA revises its global oil demand
outlook lower
Energy Market Indices WoW Changes
⇒ S&P/TSX Energy Index: -2.2%
⇒ S&P 500 E&P Index: -1.0%
⇒ Oil Service Sector Index: +0.6%
⇒ UK FTSE Oil & Gas Producers Index: -3.8%
⇒ Asia Pacific Oil & Gas Producers Index: 0%
Weekly Market Recap
WTI oil futures recovered last Friday to US$99.65/bbl (up 2.5% WoW) in the face of
bearish demand indicators last week. The IEA revised its 2011 global oil demand
growth forecast lower to +1.3mmbbl/d (down 190mbbl/d) on the IMF’s weaker
economic outlook for the OECD. Estimated oil product demand is 89.2mmbbl/d for
this year. On Wednesday, the DOE showed storage builds for crude oil of
+3.8mmbbl (vs. +1.5mmbbl consensus) and gasoline of +1.3mmbbl (vs. draw of
0.8mmbbl consensus). Also, the People’s Bank of China raised its banks’ reserve
requirement ratio to combat inflation after the rate was reported at 5.3% in April.
Concerns that the Mississippi River Valley flooding will disrupt US refineries lifted oil
prices late in the week.
In Europe, we initiated coverage on Cove Energy (COV LN) with an Outperform
rating and a 150p target price. Our analysis implies Cove is trading at a 30%
discount to Core NAV. We also published an E&P sector report, titled Searching for
Upside, that provided our estimates adjusted for FY2010 and drilling results to-date.
It was a busy week on the news front. On the Integrated side, BP took steps forward
in trying to resolve the dispute with AAR regarding BP's Arctic Alliance with Rosneft.
The share swap agreement with Rosneft is due to expire on Monday. BG reported
disappointing 1Q11 results due primarily to a miss in production volumes (9% below
our estimate) and guided to modest growth in 2011. OMV reported a 1Q11 net
income 4% below consensus and 6% below our estimate, and guided down 2011
production volumes. Repsol reported robust 1Q11 earnings (19% ahead of
consensus) driven by strong divisional results in LNG, YPF and Downstream.
On the E&P side, DNO reported first signs of export payments in Kurdistan as well
as 1Q11 results showing strong production, but lower than expected net income.
Hardy announced that it expects to drill a third exploration well by the end of 2Q11
on the D9 Block and a fourth exploration well is expected by the end of 2011 (two
exploration wells to-date in the D9 have been unsuccessful). Tullow reported
production in line with expectations and announced that its Uganda farm-in
completion is still a few weeks away. Max Petroleum announced that the ASK-1 well
in the Asanketken prospect on Block E has not yet reached TD due to mechanical
problems and that it started drilling the NARS-1 exploration well at Narmundanak
South on Block E.
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