A number of oil platforms and rigs were taken offline before Harvey hit, taking supply away from the market, where as refineries were shut down later due to the storm as were more rigs were also shut down. The price of refined products has gone up sharply where oil as dropped slightly, but the overall supply of oil in the market has decreased due to this event and the fact that OPEC has cut production and Libya has also experienced a major drop in supply over the last week.
The US is seeking to purchase refined products from Asia where Santos has operations, and LNG supply in the US has also taken a hit this week resulting in an increase to the price of LNG.
Santos has a good share of PNG LNG, has cut costs, improved margins, lowered debt, and was recently given a ‘buy’ rating by analysts (including analysts that were previously negative on Santos). I imagine these could be very interesting times for the company.
STO Price at posting:
$3.74 Sentiment: Buy Disclosure: Held
