Friday Early Brief
Posted by zmann on October 27, 2006
Spilled coffee on my keyboard so this morning’s note is going to be late and brief.
1.6% GDP – That’s not good for the oil bulls! This will surely result in a demand reduction from both the IEA and Opec in coming weeks. We’re by far the biggest market for crude so if we sneeze, oil gets a cold.
What else is not good?:
— Villagers/rebels abandoned the 3 to 4 pumping stations/platforms they stormed the other day. All is well.
— Oil is continuing to consolidate a day after giving up half its gains on a bogus inventory number. Not only was the LOOP (which on average takes in oil imports of 900,000 bopd) down for 71 hours but other undisclosed facilities on the Texas gulf coast look to have seen some downtime last time.
— Norway announced that 200,000 bopd is back online now that lifeboats have been upgraded.
On the flip side:
— Venezuela thinks Opec should cut another 300,000 bopd when it meets in December. Can’t keep up with even your reduced quota, hey Hugo?
— BP says while production at Prudhoe Bay is climbing towards 450,000 bopd, the weather, at 26 degrees F, is too warm, much warmer than normal, so that the turbines that sepearate gas from oil operate inefficiently. Apparently they are designed to run optimally at temperatures of 20 to 30 below zero. Comment: How do they run at 400,000+ bopd in the summer?
CVX, like everyone else beat 3Q expectations. I’ll dig into the numbers in a bit.
ING cuts BP to neutral
RBC cuts SU to Neutral
Credit Suise cuts APA to Neutral