Waiting for Sverdrup

Whichever way you slice it, the giant Johan Sverdrup field in the Norwegian North Sea is proving a major success for its operator, state-controlled Statoil.

The firm now expects the project’s 440,000 b/d first phase to cost 28pc less than it estimated when phase 1 was approved in 2015. The field’s recoverable resources are now pegged at 2.1bn-3.1bn bl of oil equivalent (boe), up from previous guidance of 2bn-3bn boe and initial guidance of 1.7bn-3bn boe.

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The ghost of Chinguetti

Whatever your take was on the recent paper on peak oil demand and long-run oil prices, co-authored by BP chief economist Spencer Dale and Oxford Institute for Energy Studies director Bassam Fattouh, it was hard to find fault with this line:

[If] no new investments are made and existing levels of production decline at a rate of 3pc/yr… this implies a huge and ever widening gap between oil supply and the demand profiles. Under almost any scenario, the world is likely to require significant amounts of investment in new oil production for many years to come.

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Is complacency priced in?

There is a very strong possibility that tomorrow the basket price of Opec crude will start with a six for the first time since late June 2015. Ice Brent front-month futures have been sixed-up for a few days now.

Quite the fillip ahead of the group’s meeting at the end of this month, when the key – perhaps the only – point of discussion will be how to keep a good thing going.

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Taper tantrums

The European Central Bank has signalled the end is nigh for its role as the stimulator of last resort. Seven years into ECB president Mario Draghi’s “whatever it takes” (more on that phrase later), and the eurozone economy is nearly deemed ready to stand unaided.

You can see why. GDP growth is strong, employment is up, and the bloc’s manufacturing sector expanded in August at the fastest rate since 2011, and the OECD leading indicators for the region are satisfactory.

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