What’s cookin’? OIL
The price of oil rose due to at least two reasons, which were enumerated in an article that was published in Bloomberg.com today. According to the report, the rise in oil is due to (1) the recently augmented US consumer confidence, and (2) the fact that the UN agency has verified an increased output of enriched uranium for Iran’s nuclear programme. Note that the price of oil was down earlier last week when Iran gave its consent to the UN to expand its atomic probings. On the other hand, the talks on the Persian Gulf nation’s nuclear program have not reached a solid conclusion; stakeholders have decided to resume talks in June instead.
IMO, this news could spur some interest toward some of our local oil industries.
I have reason to believe that $OV is still worth investing in. For one, Macquarie seems to be truly convinced that something is really brewing in said company. Since March 27 this year, its total investment has already amounted to around ₱232M — I bet it’s even more than that (since my account can only capture transactions from two months ago). Another reason why I think it’s worth investing in is the Galoc Phase II development, which is already in the offing with its Final Investment Decision already expected to be made in June. And of course, I’m inclined to throw in another strand — the current global sentiment on the oil market.
Some interesting nugget from the Philodrill Corp. website:
The SC 14 Galoc Consortium is confident that the upgrading of the FPSO mooring system is expected to increase the reliability and uptime of the vessel. In addition, the new mooring system is a crucial component of infrastructure to enable the Galoc Joint Venture to move ahead with a potential Phase II development of the Galoc Field.
Already, the joint venture had commenced the detailed subsurface modeling and engineering design works in late 2011 and remain on schedule for the Final Investment Decision for the Phase II development which is due to be made around mid-2012.
First thing’s first, Macquarie, UBS, DBP-DAIWA, and Deutsche Regis are invested in PXP. Seeing Deutsche there in the list allows me to confer a certain level of credence in the MVP chaired oil company. Moreover, I am inclined to have a positive outlook on the company due to the on-going talks between MVP and the state-owned China National Offshore Oil Corp (CNOOC).
The recent talks in Beijing between Philex Petroleum chair Manuel Pangilinan and the state-owned China National Offshore Oil Corp (CNOOC), the COL Financial research said, showed China’s strong interest in doing business in the Philippines, particularly in a major oil and gas discovery along Recto Bank. – Inquirer Global Nation
Chart-wise, PXP is already in the overbought level with some price action happening across the upper-band of the Bollinger. It’s only rational to suspect some profit-taking in the near-term. But then again… people have bounded-rationality.
FYI: LIST OF TOP RANKING TRADING PARTICIPANTS IN THE PSE: