Talisman deal indicates companies still ready to invest in energy
It appears a bid for Canadian independent energy producer Talisman is in the final stages as Repsol’s board meets to discuss a bid. A fresh report from Bloomberg also says Canada’s pension fund is also weighing a deal for Talisman.
It’s tough to draw any conclusions from a single deal but it if companies are still willing to put money to work in the oil patch that’s a bad thing for oil prices. It means money will continue working to produce more supply, even as prices plummet.
News today of slower production in Libya stopped the bleeding in crude prices after a fresh cycle low of $56.25 in WTI. Fighting near the country’s largest and third-largest crude ports prompted the shutdown.
The best sign for crude would be production shutdowns based on lower prices but time and time again, companies and countries (the UAE today) say they will continue to pump oil.
At least bulls can take some solace in comments like this, that suggest there is virtually zero optimism left.
“Libya may have helped the market stay above $60,” Christopher Bellew, senior broker at Jefferies International Ltd. in London, said by e-mail. “Maybe some optimists think that $60 marks the bottom of the market, but I can see nothing to support that theory.”
