Irish exploration stocks decline but oil rebounds

Irish-related exploration stocks performed poorly yesterday, despite a rally in global oil prices which saw prices rebound by more than 3% to exceed $40 per barrel.

Africa-focused Tullow Oil was the best performing — rising in London by just under 1% to £1.26 (€1.50) — but there were falls for the likes of Providence Resources, which fell by over 3% to 11.5p, and Europa Oil and Gas which fell by over 8%.

Earlier this week, London-based Europa secured an extension to the first exploration phase for key licences in Irish waters, allowing it to mature its local prospects and more time to find development partners.

Oil prices jumped yesterday, with US crude futures returning to above $40 a barrel, after a larger-than- expected petrol draw offset a surprise build in crude stockpiles in the number one oil consumer. Brent crude rose by 3.2%, to $43.10.

“We are not surprised to see spot prices rebounding on the gasoline draw. But I think this will be short-lived,” said a US analyst.

Oil rallied from 12-year lows of $26-$27 in the first quarter to almost $53 in June, boosted initially by a failed OPEC plan to freeze output. But a global glut in motor fuels and other refined products since have stymied the rebound.

Worries about slowing economies in Asia and Europe have weighed, along with near record-high Opec output and signs of a new price war for crude.