New Projects and good prospects. will be the winner in 2004. IMO
25p in early 2004

Thanks! Just hope the unexpected happens then. Still have that hunch!

OPEC to keep grip as oil supply lags demand
Tue 13 July, 2004 12:15



By Jonathan Leff

LONDON (Reuters) - The world's dependence on OPEC's oil is expected to increase again next year, supporting cartel efforts to keep prices high as robust demand growth outpaces non-OPEC output, a Reuters survey has found.

Demand growth is likely to climb by 1.8 million barrels per day (bpd) next year, well in advance of extra non-OPEC supply of just one million bpd, according to a survey of 13 analysts.

"The narrative is that demand is weaker than this year, but non-OPEC supply growth will still not be able to meet it," said Roger Diwan, managing director of the Washington DC-based Petroleum Finance Company.

This means the Organisation of the Petroleum Exporting Countries, which produces about a third of the world's oil, should have little difficult maintaining its grip on markets, keeping inventories low to extend an oil-price rally into a sixth year.

Many analysts now expect the challenge for OPEC to be less one of maintaining a floor for prices than managing to keep up with robust demand growth in the face of limited spare capacity.

"Our view is that OPEC...doesn't have a lot of spare capacity to bring this market down," said Jeff Currie, head of Goldman Sachs' global commodities research.

Demand next year is forecast to rise to about 83 million bpd, up from a mean base of 81.2 million bpd this year, while non-OPEC supply climbs to 50.8 million bpd, the survey found.

Estimates on outright levels differed depending on varied baseline assumptions for this year. The range of demand growth forecasts varied from 1.4 to 2.4 million bpd, while non-OPEC supply growth was pegged between 700,000 bpd and 1.4 million bpd.

The International Energy Agency releases its forecasts for 2005 on Tuesday.

PRICES TO STAY HIGH

Demand growth is seen surging 2.3 million bpd in 2004, the fastest in 24 years, according to the IEA's last monthly report. Non-OPEC supplies, however, are rising only by 1.2 million bpd.

"Even though OPEC's market share is not going up as much in 2005 as this year, the upward pressure on prices probably remains," said Deutsche Bank analyst Adam Sieminski.

That is in part because the anticipated surge in non-cartel production that had once been forecast for next year appears to have fizzled.

Some major West African and Caspian oil mega-projects are taking longer than expected, and the outlook for the former Soviet Union as a whole now appears bleaker than before, particularly given the threat to major producer YUKOS.

"Going forward, Russia's growth profile is a critical element in a supply side that is looking increasingly challenged in keeping up with demand," said Barclays Capital in a report.

Last week the U.S. Department of Energy downgraded its 2005 supply forecast for the former Soviet Union, a major engine for non-OPEC growth, by 500,000 bpd to 11.5 million bpd in this month's short-term outlook.

It now expects only 500,000 bpd growth from the region this year. This has in turn pushed its total non-OPEC supply growth forecast for 2005 down to 1.1 million bpd from 1.5 million bpd.

Meeting another year of two-percent-plus demand growth will depend on a continuing economic recovery in the United States and growth from China, which has been the primary engine for this year's surge, analysts say.

"The question is whether continuing robust economic growth is consistent with continuing high oil prices," said Steve Turner, oil analyst with Commerzbank.

so for the unitiated in all this - is it worth staying in this one currently as showing a loss as bought in c16 - expected to get to 20p?

Yes, for Heaven's sake stay in IMO. There should be some exitement as the start of drilling is announced next month with an almost inevitable price rise to at least 15+, hopefully more.

That is when I hope to top slice some profit on half my holding.

These are a hell of a good bet - if they don't come good on the first well (and oil is known to be present) they have another up their sleeve in Tunisia, not to mention Italy and the Irish Sea. You could be kicking yourself if you sell now unless you are well in profit and want to gamble on further price drops in the near future.

I agree!! Hold on there!! I bought last November and convinced we will all reap the rewards for our patience and commitment to what I consider will be of the true success stories of 2004!! Since November, PCI have been climbing steadily, ableit slowly at times. I was slightly concerned they were racing ahead over the last two weeks or so and although have fallen back, they are now at an excellent base to start climbing again, sensibly (that's until we hear of their drilling programme which more should be known sometime next month). From there on, history!!!! I have that hunch, hold tight,keep simling, as this is going to be a real winner and a big one too!!

US stocks turn lower as oil price jumps
By Elizabeth Wine in New York
Published: July 14 2004 13:56 | Last Updated: July 14 2004 19:36


US markets turned lower in afternoon trade as investors reacted to a jump in the oil price and refreshed terror fears, and continued to fret about disappointing guidance from Intel and an unexpected dip in retail sales.


With a few hours left in the session, the Dow Jones Industrial Average was down 0.1 per cent at 10,237.86, while the S&P 500 was off fractionally at 1,114.91. The Nasdaq Composite was down 0.3 per cent at 1,925.16.

Oil prices leapt above $40 a barrel on reports the FBI warned local law enforcement agencies that recent overseas terrorist attacks "highlight terrorists' interests in targeting energy-related infrastructures."

from www.t1ps.com

Petroceltic (PCI)


One of my personal rules regarding stocks and charting is not to try and make calls on charts with complicated looking price action. This should make Petroceltic an ideal choice in that nobody could suggest that the chart is very complicated. Apart from the June dip below 7.5p we have seen higher highs since the turn of the year with an acceleration to the upside since the minor bear trap early last month. The technical expectation now would be that Petroceltic will continue to make strong headway up to the top of the February ascending price channel through 25p. Only a two day close below the May support line at 12p would delay the upside, with the ultimate stop loss being the 50 day moving average at 8.6p on a weekly close stop loss basis.

Notice the profit takers were out in force this week with PCI. No doubt they will all be buying back in again soon. Price did rise a bit too quickly last week and some profit taking was inevitable, but they'll buy back. No way I'm selling now before drilling later in year!

Same country, just a different company. Thought it should be posted.


Paladin Resources PLC announced another oil discovery in Tunisia, the third one in a row.The well, known as Dalia 1, flowed at a rate of 3,600 barrels per day.It is the latest exploration well in the Adam concession in southern Tunisia.

'This is our third oil and gas discovery in succession in Tunisia, which, with rapid tieback to existing process facilities, should be contributing to the company's operating cash flow in a matter of weeks,' said chief executive Roy Franklin.

The well, operated by Italy's ENI SpA, was spudded on May 20 and encountered 'several oil and gas bearing zones' at a delpth of approximately 3,400 metres.


Paladin said it expects that field production will commence within the next few weeks.

The rig will move shortly to the adjacent Hawa field to drill a second production well.

If the Tunisian state oil company, ETAP, confirms their intent to join the project, Paladin will have a 7 pct interest in the Dalia field.

ETAP, in turn, will hold a 30 pct stake, while operator ENI will hold 35 pct. Pioneer Natural Resources Co will get the remaining 28 pct.

Paladin added negotiations are ongoing to allow the commercial production of gas from the Adam concession to begin later in 2004

Morning all. Back from a few days away. Nice to see we are blue this morning.

Morning Grevis. Hope you enjoyed your few days away. Would be good to see if we could crack the 15p mark today.

Morning gavdfc. Seems as though I missed some fun whilst I was away. I think we are likely to see these consolidating around this level for a while. On the downside they may drop below 13p again, but who knows?

What's next for oil?

By James Arnold
BBC News Online business reporter



Turning on the taps won't change much
Five years ago, pundits were worried that oil was getting too cheap. The $5 barrel looked a genuine prospect, heralding a wave of instability in producing countries from Venezuela to Iran.

Now, the graphs are pointing the other way. $50 a barrel is not too far off, and doom-mongers warn a terrorist outrage could push prices to $80 and beyond.

Attempting to predict the oil market, then, is a mug's game. But since things seem to have reached some sort of crossroads, it's at least worth trying out a few possible scenarios for the way prices could develop.

BBC News Online has this guide to the three most likely outcomes.


STEADY RETRENCHMENT
What's this?

A sizeable body of opinion thinks we're in the grip of temporary market madness.

The fever of wartime speculation will ease, and what analysts call "market fundamentals" will reassert themselves.


There's no reason for prices to crash, but they will drift back down - probably below $30 a barrel for Brent crude (currently at more than $38) by, say, the end of this year.

What effects would it have?

Really cheap oil is not a prospect.

With oil prices around Opec's target price of $28 a barrel, the market will return to the uneasy equilibrium of the past few years.

That sort of price is enough to keep producers ticking over, but not seriously enough to encourage major new sources of crude to be brought on stream.

With extraction costs in pricey places like the former Soviet Union at $15 a barrel and more, investing billions in ports and pipelines doesn't make a great deal of sense.

And that will keep the market tight, with possibly only 2 million barrels per day of spare capacity, in a global market of 80 million barrels per day.

How likely is it?

Less likely than many people seem to think.


How do you value risk?
The retrenchment scenario depends on at least one major shift in the supply-demand balance - a definitive easing of Middle East tensions; a serious slackening in demand, especially in the US; or a major spurt in output among major producers like Venezuela or Russia.

None of these looks hugely likely in the near term.

Much hope is pinned on the gradual disappearance of the "risk premium", which has raised prices in response to fears of serious supply disruption.

Until this week, this premium was seen as being $4-8 of the oil price; now, estimates go as high as $12.

But oil has always carried a risk premium, the result of the fact that it tends to be produced in unstable countries. And eradicating what appears to be a speculative bubble will demand convincing the markets that the threat of terrorism has been eradicated for good.


ONWARDS AND UPWARDS

What's this?

Prices remain high, and may continue to march even higher.

Producers do their best to crank up production, but runaway demand combines with that persistent risk premium to ensure that demand outpaces supply.

In the very long term, wholly new sources of oil could be mapped, explored and exploited, but only after years of historically high prices.

What effects would it have?

A lot of effort has gone into drawing parallels between now and the oil price shock of the late 1970s.

Then, high oil prices battered the industrial economies of the developed world, and accelerated a structural shift away from traditional smokestack businesses.


This time, things may not be so bad.

In real terms, oil prices are not so high: crude would need to double in price to reach the same sort of levels seen in the early 1980s.

And today's economies are less dependent on oil than they were. The US, for example, now produces twice as much economic output per barrel of oil as it did in the 1970s.

Forecasting firm Global Insight reckons $40 oil would shave only 0.4 percentage points off US economic growth next year, and that the effect would moderate as time wears on.

Not everyone is so sanguine, however: the more fragile economies of Asia certainly have more to lose from long-term high oil prices.

But even there, the effects would be balanced by rising output in other areas, if oil-producing countries spend their extra petrodollars on more lavish imports.

How likely is it?

Given that this scenario depends largely on things staying as they are, it's probably the most likely of all.


And he's not the only one
Even if the risk premium moderates, there are many potential disruptions to supply on the horizon.

In Venezuela, for instance, once-plentiful production is being hammered by the weakness of state oil firm PDVSA.

Nor is it easy for production to grow in response to higher prices.

It can take up to a year to bring new output on stream even in established patches of production; opening up new areas - the Gulf of Guinea, for example - is the work of decades.

On the demand side, there is little hint of change. The US consumer is predicted to remain thirsty at least for the next two decades, counterbalancing predicted improvements in fuel efficiency.


INTO THE STRATOSPHERE


What's this?

A terrorist attack or war puts a serious crimp in oil supplies.


In Saudi Arabia, for example, it is reckoned that a really successful attack on the central oil-processing facility at Abqaiq could halve exports for up to a year.

All oil producing countries have their bottlenecks, key ports, pipelines or pumping stations whose elimination would cripple the industry.

The market result of such an attack is incalculable. But if Saudi exports were hobbled, $80 a barrel does not seem unreasonable.

What effects would it have?

Consumers can live with $40 a barrel; they can probably also come to terms with $50.

The question is what price level would start to make the global economy really hurt.

US analysts say the current fuss over the $2 gallon of petrol is a storm in a teacup, but that there would be genuine pain if the price approached $3.

Among developing economies, very high oil prices will have a devastating effect:


Poor countries tend either to be very inefficient oil users, producing very little economic output per barrel of oil, or very sparing consumers, because their economies are primarily agrarian - in which case, high prices will prevent them emerging into the next stage of development.

Nor would oil producers benefit, if high prices push consumers toward seeking alternatives to oil.

At $40 a barrel, oil producers spread some of their wealth by buying in more imports; that trickledown would simply not happen at, say, $80.

How likely is it?

Who can tell? Terrorists are known to be targeting Saudi Arabia's oil facilities, but their chances of pulling off a real spectacular are unguessable.

The Saudi government says there have been five active al-Qaeda cells in the country, but that four have been broken up, and the last is now being dismantled.

Nevertheless, a recent study by the Centre for Strategic and International Studies concluded that "short-term successes have not removed cadres that are well equipped with arms and explosives, and past experience indicates that extremists and terrorists will soon change tactics, acquire better intelligence, and become far more sophisticated".

However clever the pundits may sound, the whole thing is pretty much anybody's guess.

For more article.............very interesting

http://news.bbc.co.uk/1/hi/world/3625207.stm

LONDON, July 16 (Reuters) - U.S. oil prices held firm near $41 on Friday as the most robust demand growth for more than two decades pushes OPEC to keep pumping crude at near capacity, leaving world supplies vulnerable to the slightest production hiccups.
U.S. light crude rose 18 cents to $40.95 a barrel, just a hair away from a six-week high of $41.12 touched on Wednesday. And prices are near June's $42.45 peak, a record for the contract's 21-year history.
European benchmark Brent was up 29 cents at $37.77 a barrel, buoyed by an exceptionally strong cash crude market in the North Sea.
Gains were spurred this week by an unexpected decline in U.S. crude and gasoline inventories, plus worries that heating oil supplies are not being built-up quickly enough ahead of the winter.
The U.S. oil data added to fears over supply disruptions at a time when output capacity was being stretched by rapidly growing demand -- estimated to be expanding at 2.5 million barrels per day (bpd) this year, its fastest clip in 24 years, according to the International Energy Agency (IEA).
The Organisation of the Petroleum Exporting Countries (OPEC) is proceeding with its planned output ceiling hike of 500,000 bpd from August 1 in an effort to cool prices, but it looks unlikely to mean more crude.
The group, which controls around half the world's oil exports, is already pumping nearly two million bpd over its new 26 million bpd August quota, very near the its maximum capacity.
With little to discuss, the cartel cancelled next week's planned ministerial meeting. It will next meet September 15.
"The cartel perhaps concluded that aside from the Saudis, the rest of the group is pretty much tapped out in terms of exports," said Ed Meir, analyst at brokers Man Financial. "Therefore, having a meeting to discuss more 'phantom' quota increases would be of little use."
Kuwait said on Thursday it had spare oil production capacity of almost 100,000 bpd, while Saudi Arabia, which has been producing around 9.1 million bpd, has the capacity to crank it up to 10.5 million bpd.
"The meeting is cancelled because the market is stable. There is no problem at the moment because the decision to increase 500,000 bpd from August 1 is in place," OPEC president Purnomo Yusgiantoro told Reuters on Friday.
HEATING OIL WORRIES
Distillate supplies in the United States, where the Northeast region is a major winter-time consumer of heating oil, have emerged as an early driver for the energy complex as dealers fretted over the pace of pre-winter inventory building.
Heating oil futures reached a year-and-a-half high of $1.1080 a gallon this week, the strongest on record for July, when gasoline is typically the market's strongest product. On Friday, it was trading up 22 points at $1.1008.
Seeking to avoid panic buying, the U.S. government Energy Information Administration (EIA) said on Thursday there was plenty of time to boost heating oil inventories before the winter heating season arrives, so traders should not bid up fuel prices.
It's much too early to worry about heating fuel supplies, EIA administrator Guy Caruso told reporters.
This week's EIA data reported a significant build up of 2.7 million barrels in middle distillate inventories for the week ended July 9, putting them three percent above this time last year.
Caruso conceded that the United States came out of the spring with relatively low heating oil stocks, but added that if crude imports continued to average 10 million bpd and there were no major refinery outages, heating oil stocks should be in the "normal zone" by November.
Still analysts said that, while stock levels looked comfortable on the surface, rapid economic growth could place more demands on inventories than in previous years.
Tetsu Emori, chief commodities strategist at Mitsui Bussan Futures in Tokyo, said fund speculators would remain on the buy side of the market on persistent fears of disruptions to crude flows in Iraq and possible refinery outages in the United States.
"There are no bearish factors in the market. Already we are over $40 and there is still room to move higher," he said.

Thanks for all these Xmortal. Not the best end to the week, but at least we held at 14p. Better than in the red! Bring on Monday!

U.S. addiction to foreign oil deepens
Mon 19 July, 2004 09:09



By Timothy Gardner

NEW YORK (Reuters) - U.S. domestic oil production has dropped five percent since this year's peak in February and near-record oil prices are unlikely to inspire drillers to slow the country's deepening dependence on foreign oil, experts say.

"Why on earth would you drill here when we've been drilling here for 120 years and when there's vast untapped regions across the globe?" said Kyle Cooper, analyst at Citigroup Global Markets in Houston.

U.S. pumps pulled 5.43 million barrels per day of oil in early July compared to 5.70 million bpd in early February, according to the federal Energy Information Administration. The United States uses all of its domestic crude production. It relies on imports of crude and oil products for the remainder of the approximately 20 million bpd of oil it burns daily.

As domestic output dropped this summer, crude imports averaged more than 10 million bpd for a record two months, the EIA said this week.

U.S. production often falls in the summer as workers repair Alaskan oil infrastructure during the thaw. But rarely has the summer production droop been so deep.

Last year in early July, for example, domestic output was slightly above February production. By August, production had only slipped about two percent below February output.

A six-week outage of Royal Dutch/Shell's 150,000 bpd deepwater Mars platform this summer in the U.S. Gulf coast helped to cut output.

But the impact of outages is intensified by a long-term drop in U.S. oil output, said Mir Yousufuddin, who tracks oil production for the EIA in Dallas. U.S. oil output peaked during the Arab oil embargo of 1973 when production was 9.3 million bpd.

U.S. production in 2003 fell 1.5 percent to about 5.7 million bpd, and the trend is on track to fall.

GULF BOOM WONT CUT ZOOM IN FOREIGN IMPORTS

New production from the U.S. Gulf deepwater oilfields next year will help cut the U.S. decline, but a long-term drop in California production, the nations fourth largest oil producer, combined with rising U.S. demand, and a fall in domestic drilling since 2001 wont cut reliance on record imports, experts said.

Seven new field start-ups in the U.S. Gulf in the second half of 2004 as well as BP's Holstein and Thunderhorse fields in 2005 could add as much as 450,000 bpd at peak if all goes well.

But that will not stem the decline of production of mature fields in Texas and Oklahoma, and especially California. In the Golden state, output has fallen about from 842,000 bpd in 2000 to an average of 742,000 bpd from October last year to March this year, according to state records.

And U.S. petroleum demand will rise 380,000 bpd this year and another 300,000 barrels next year, the EIA estimates in its latest monthly report.

U.S. President George Bush's plan to tap the Arctic National Wildlife Reserve, believed to hold as much as 16 billion barrels of crude, has so far been thwarted by environmentalists. Even if ANWR was tapped, production would take about 10 years to begin according to government estimates.

What's more, record prices for oil futures of over $42 per barrel hit this summer have failed to dramatically boost oil exploration drilling, except in California.

Despite record oil futures, there were 168 rigs searching for oil in the United States last week, up 14 from last year, but down 55 from the same week in 2001, according to the Baker Hughes rig count.

"We've expected an increase for almost a year now," said EIAs Yousufuddin. "The industry for some reason is holding tight. They are investing in repurchasing their own stock, investing somewhere else, not in exploration drilling."

Virgin oilfields in Africa and Latin America have made major U.S. oil companies explore elsewhere. "When the fields and the production rates are so much higher, when your environmental, regulatory issues and labor costs are so much lower, you can afford pay $3.50 to $4.00 (a barrel) in transportation costs to ship oil from there to here," said Cooper. He said lifting costs can average as much as $10 a barrel abroad and as much as $20 a barrel in the states.

The impact on increased foreign oil demand on U.S. consumers is debatable.

Some see the lower lifting costs abroad as a bonus. Others see the growing dependence on foreign oil as a potential problem, especially with American drivers fondness for big automobiles.

"Its not good for the consumer to rely on foreign oil," said Jack Aydin, analyst at Keybanc Capital Markets. "But lets put it in perspective. Europe has relied on foreign oil all along. It hasn't hurt them, except they cannot have cars getting 12 miles a gallon (19.2 kilometers per 3.8 liters)."

Some good posts on the TMF oil and gas board todayon the Tunisian prospects.

Just out:

Petroceltic International PLC
20 July 2004

Petroceltic International plc

20 July 2004


Petroceltic International plc ('Petroceltic' or the 'Company')

Holding in Company

The Company has received a notification dated 19 July 2004 from FMR Corp. and
Fidelity International Limited (together 'Fidelity') stating that, following an
acquisition of shares, Fidelity hold 35,544,294 ordinary shares representing
7.17 per cent. of the Company's issued ordinary share capital. The shares are
held on behalf of a range of clients with the following nominee/registered
names;

Mellon Bank 21,067,934

Chase Manhattan Bank, London 7,575,811

Brown Brothers Harriman Ltd., LUX 930,228

Deutsche Bank AG London 467,046

HSBC 5,503,275


This information is provided by RNS
The company news service from the London Stock Exchange

We have blue this morning!