Offshore

Offshore: The back drop for the offshore sector continues to be positive for the long term, with bidders offering Petrobras daily rates of US$638k-740k/ day for deep water drilling rigs. Petrobras had expected to rent the rigs for US$500k/day, leading it to cancel its tender for 4 drilling units, and consider changing contract regulations to hire foreign built rigs to reduce costs…

However, the 4.8% pullback in Brent futures to US$120.69/barrel since the start of this wk may put a lid on stock prices of rig builders in the near term. The IEA said that oil prices above US$100/barrel are starting to hurt the global economy and Goldman Sachs forecast a “substantial” correction in Brent to US$105, as the oil market has adequate inventory and OPEC spare production capacity.