Tullow Oil plc is one of the largest independent oil and gas, exploration and production companies in Europe. Tullow Oil produces over 56,000 boepd, with a primary focus on UK Gas and West African Oil, underpinned by development projects in the UK, Africa and South Asia.

            Red = 25 day moving average.           Green = 200 day moving average.

From The Times December 13, 2008

Expert cuts $200-a-barrel oil forecast to $45
Robin Pagnamenta, Energy and Environment Editor

The leading Goldman Sachs oil analyst, who had been one of the market's biggest bulls this year, predicting that crude could hit $200 a barrel, has slashed his 2009 forecast to $45, blaming incredibly weak demand as the global economy plunges into recession.

Arjun Murti, the New York energy analyst for the US investment bank, came to prominence in 2005, when he was among the first to predict accurately a superspike in prices to more than $100 a barrel. For each of the successive three years, his forecasts were consistently higher - and usually closer to the mark - than those of most of his peers.

However, Mr Murti was left red-faced this autumn when his prediction that prices could reach $200 proved far-fetched. Instead, they nosedived from a high of $147 a barrel on July 11 to $48.50 yesterday.

In a research note published late on Thursday, Mr Murti's team said that it had been compelled to trim its average price outlook for next year to $45, from a previously reduced forecast of $75, because of a continued deterioration in global oil demand.

The note read: Global economic conditions are the weakest the world has seen since at least the early 1980s and demand is declining at an accelerating rate.

Mr Murti added that demand for crude was so weak that Opec, the cartel of 13 oil-producing nations, which will meet next week in Algeria, would be unable to force prices higher through further production cuts.

We think that the sharp and sudden collapse in global oil demand exceeds Opec's ability to, on its own, balance markets, and necessitates sharply lower non-Opec crude-oil supply, the report said.

Nevertheless, Mr Murti also asserted that there were signs that crude prices could be close to a turning point. We see a growing number of signs that oil markets have entered the bottoming phase of the cycle, the report said, adding that positive demand growth and shrinking non-Opec supply would push prices to $70 a barrel by 2010 and to $105 by 2012.

We do not believe oil markets are on track for a decade-plus period of weakness like seen in the 1980s and 1990s, the report said.

In a separate study published yesterday, another group of Goldman commodities analysts predicted that world oil demand would fall by 1.7 million barrels a day, helping to drive oil prices down to as low as $30 a barrel in the first quarter of next year.

We expect that an additional 2 million barrels per day of Opec supply cuts will be required in 2009, along with a 600,000 barrels per day reduction in non-Opec production, in order to rebalance the market, the analysts wrote.

Frankly, even for the experts it's just a guess as to which way oil is going to go, with a cold winter here in Northern Europe and a big demand for heating oil, gas, and production cuts from Opec, I would have liked to think that a rise might be on the cards; but I have to admit that it's always North America that seems to have the final say, a cold winter up there and their car industry put back on track with some input from Washington coupled with Opec restrictions might trigger a little recovery around the new year !.

For once and probably only once, I agree with you although I suspect the recovery will be a little later.

Crikey !, somebody agrees with me, jeepers !, never expected that !, I must open a bottle of something !, now let me see : Dom perignon, Moet, Chateau Vintage....hmmmm...seem to be out of bubbly...oh well, must make do with a can of beer !.

Well i agree with you RF, what about sharing a bottle of meths?.

Only kidding.

But surely the sentiment issue coming from OPEC will have a direct effect on the oil price for a while.

Well there's a very cold snap on the North American east coast, we shall see what effect that will have on crude and gas prices in the next few days.

Another strike, TLW turning into a Cairn ?,tremendous results for the 2 partners (Tlw an Hoil) in Uganda.....if only Idi had known, he must be cursing from his grave !.

Glad to be holding but I prefer DNX.

Holding both !.

Well done same here.

an interesting conundrum
it is heavily rumoured that TLW will exercise their option to buy the HOIL Uganda licences, thus scuppering ENI's effort.
the big Q is what will be the effect of so doing, not only on TLW, but to a lesser extent to HOIL?

I thought a year ago that Tullow Oil should buy Heritage Oil...they should have done so.

Can they buy DGO. It's 50% undervalued over TLW

why on earth would TLW want to do that?

A company will only acquire another company that fits in with their development program....Dragon oil might not fit the bill but Heritage would.

any idea why TLW and HOIL have both lost ground today??

HOIL - because there is now no compelling or even particular reason to hold
TLW - has only lost a smidge, and that is presumably because it will be shelling out for HOIL's Uganda stake

whats the future possibilities for hoil then cynic?

no idea ..... i'm out of them for now ..... check their site as i think they may also share another field with TLW off ghana or nigeria

The problem with both HOIL and TLW and their discoveries in Uganda is the massive investment required to exploit these finds. It is difficult to believe either company can afford to go it alone hence HOIL deciding to sell out to ENI.