BP and Shell both reported on Q1 this week and stunned the market with strong results. For example Shell Current Cost profit for Q1 was 12% up on the prior year, for BP the increase was 48%. The BP result was pretty exceptional but otherwise I'm not sure why there was so much surprise given that the current record oil prices are well known about. Under typical Production Sharing Contracts (PSCs) high oil prices have the effect of reducing volumes so it is wrong to look at production volumes in isolation without adjusting for this. The FT was grudging in it's appreciation commenting that without high oil prices it would be a very different story. But then, for me, the high oil price is the story.
As some of my friends know I have been predicting high oil prices for some time now. Over the past 12 months oil has more or less doubled to around $120. The head of OPEC Chakib Khelil has just warned that oil could hit $200. I think so too (just don't know when) and continue to invest accordingly.
Philosophy of the Day
Subscribe to:
Post Comments (Atom)
No comments:
Post a Comment