Painted Pony Pete Ltd PDPYF

RE:RE:Buying 1/2 positions on PPY and TOU

[fergus2]

Can't let non-OPEC nations take advantage of output cuts: Saudi oil minister

At the CERAWeek industry conference in Houston this week the Saudis have fired a shot over the bow of U.S. oil drillers with warnings of not to offset OPEC’s efforts to bring supply in line with demand.  They pointed out that global inventories were 300 million barrels over historic levels suggesting that now is not the time to ramp up production.

You will remember, even if it was not spelled out in words per se, that U.S drillers did in fact comply during the the last 2 years to rein in production. But the Saudi warning delivered to Cera delegates in Huston (home base of Exxon Mobil) is….. We ain’t there yet, so let’s avoid the bouts of irrational enthusiasm!   

So don’t be too sure the oil rig count will go straight up as some have suggested. And if it turns out this way it means less associated NG which is usually dumped in times of high oil prices. In the absence of that associated gas NG production, plays like the Barnett and Haynesville need much better prices before gas directed rigs can prove profitable. This means the existing well demographic continues to age. This means better prices for NG and soon!!!