Global oil supply is tightening — but that’s yet to translate into investor interest for oil juniors.

The latest price pressure comes from a US move this week to re-impose sanctions on Iran, limiting their oil exports.

The price of Brent Oil — the global benchmark — has eased over the past month after reaching a near four-year high.

But Wood Mackenzie executive Ann-Louise Hittle says the latest move by the US will pull 1 million barrels a day from global circulation. On top of a similar loss in supply from Venezuela, global spare capacity is now only at 700,000 barrels a day.

The International Energy Agency puts the shortage even lower, at 580,000 barrels in October.

“That means the market is vulnerable to strong demand in a cold winter or any new supply outage,” Ms Hittle said.

>> Scroll down for a table showing the recent price performance of ASX oil juniors

ASX investors are yet to read the tea leaves though.

“I’m a bit miffed to be honest,” says Key Petroleum (ASX:KEY) managing director Kane Marshall, referring to a lack of interest in his fully-funded plans for 2019.

“I’d like to think that sentiment has picked up in the last six months, but it hasn’t translated in activity.

“There’s been a lot of damaged confidence in the industry.”

Fund managers and brokers are showing little interest in ASX oil juniors despite growing oil demand, a lack of major exploration and uncertainty for supply.

“Discoveries have to be made or prices are going back to $US100,” says Mr Marshall.

“That’s not rocket science, it’s a fundamental thing — a single macro economic theme that people are overlooking. Then it’ll be FOMO [fear of missing out] as prices start to run.

“When things change it they will change very quickly.”

Only 17 of the 55 or so oil small caps Stockhead monitors have seen double digit growth in the last six months and only a handful of those have Australian operations. (See table below).

The biggest mover was IPB Petroleum (ASX:IPB) but only because of reflected glory: its offshore exploration permits are neighbours to those snapped up by Santos when it bought another company in August.

Investor interest underwhelms

Players in the Australian upstream oil market — including explorers Key Petroleum and Carnarvon (ASX:CVN) and producers like Buru Energy (ASX:BRU) and Beach Energy (ASX:BPT) — expected activity to kick-start the sector mid-year.

In the first half of the year Brent and West Texas crude oil prices were heading upwards thanks to efforts by OPEC a year earlier to cut supply, and US President Donald Trump announced sanctions on Iran oil would restart on November 5.

Carnarvon made the biggest offshore oil discovery in North West Australia in years in July.

A month later it seemed that merger and acquisition activity was on the rise too as Santos bought Carnarvon investor Quadrant.

Even Bureau of Statistics data indicated seasonally adjusted spending on petroleum exploration — oil and gas — rose 84.8 per cent to $326.6m in the June quarter.

But after a flurry in May that saw services company Baker Hughes’ active drilling rig count bounce from 17 in April to 22, that number has slid to 20 and 21 in September and October.

The rig count data is a proxy for how much exploration is taking place.

Graeme Bethune, founder of energy sector analyst EnergyQuest, told Stockhead exploration had been improving but from a very low base and spending is still “fairly low”.

Don’t frighten the horses

Volatile markets are causing already-skittish investors to be gun-shy around a sector that has failed to capture consistent support — even brokers who covered the junior sector earlier in the year told Stockhead they no longer do now.

There are buds of optimism however.

Mr Bethune says higher oil prices are helping to boost exploration.

US crude is back down to $US62 but Brent, a measure for North Sea oil, veered towards $US90.

Seven of 21 offshore exploration permits offered by the federal government were taken up. While until now exploration has largely been left to the juniors, four of those permits were taken by global giants BP, Shell and Inpex.

The ASX also has a handful of oil juniors operating in Australia which range from very speculative explorers to producers.

Producers include Cooper Energy (ASX:COE), Triangle Energy (ASX:TEG), Bounty Oil & Gas (ASX:BUY), Senex and Buru are all producing oil in Australian dollars at home and selling in US dollars.

Buru reckoned it would crack the $100 a barrel mark in October, Triangle and Bounty took almost that per barrel in the September quarter, and Senex says it was topping out at $114.

Others like Key and Carnarvon are prepping to start drilling programs in early 2019 while IPB and 3D Oil (ASX: TDO) are selling ‘proximity plays’ near the Quadrant areas and in the Bedout basin, respectively.

Here’s a table showing the recent price performance of ASX oil juniors:

Scroll or swipe for full table. Click headings to sort

ASX code Company Six-month price change 12-month price change Price Nov 6 (intraday) Market Cap
IPB IPB PETROLEUM LI 2.375 1.45454545455 0.027 5.4M
HE8 HELIOS ENERGY 1.95454545455 2.25 0.13 184.0M
CVN CARNARVON PETROL 1.27272727273 2.75 0.375 422.4M
OEX OILEX 0.666666666667 0.666666666667 0.005 6.8M
STX STRIKE ENERGY 0.486842105263 0.738461538462 0.113 142.3M
MAY MELBANA ENERGY 0.454545454545 0.777777777778 0.016 29.9M
TDO 3D OIL 0.414285714286 0.2375 0.099 27.8M
PVE PO VALLEY ENERGY 0.4 0.4 0.042 24.9M
PSA PETSEC ENERGY 0.368421052632 0.529411764706 0.13 43.4M
REY REY RESOURCES 0.363636363636 0 0.3 63.7M
SEA SUNDANCE ENERGY 0.31746031746 0.456140350877 0.083 549.9M
BRK BROOKSIDE ENERGY 0.25 0.25 0.015 12.9M
COE COOPER ENERGY 0.232876712329 0.363636363636 0.45 736.5M
TAP TAP OIL 0.22972972973 0.281690140845 0.091 38.3M
KPL KINA PETROLEUM 0.183098591549 -0.0454545454545 0.084 32.2M
CUE CUE ENERGY RES 0.149253731343 0.283333333333 0.077 54.5M
AJQ ARMOUR ENERGY 0.134146341463 0.0449438202247 0.093 47.6M
COI COMET RIDGE 0.078125 0.301886792453 0.345 251.1M
GBP GLOBAL PETROLEUM 0.03125 0 0.033 6.7M
RLE REAL ENERGY CORP 0.021978021978 0.27397260274 0.093 28.0M
TEG TRIANGLE ENERGY 0 -0.5 0.08 17.9M
EMP EMPEROR ENERGY 0 -0.25 0.003 2.7M
ATS AUSTRALIS OIL & GAS -0.0125 0.717391304348 0.395 349.4M
HZN HORIZON OIL -0.0666666666667 0.944444444444 0.14 188.8M
MEL METGASCO -0.0714285714286 0 0.052 20.3M
AOW AMERICAN PATRIOT -0.08 -0.233333333333 0.023 13.0M
ICN ICON ENERGY -0.12 -0.185185185185 0.022 13.1M
CTP CENTRAL PETROLEUM -0.129032258065 0.534090909091 0.135 99.0M
BUY BOUNTY OIL & GAS -0.166666666667 -0.285714285714 0.005 4.8M
ELK ELK PETROLEUM -0.181818181818 0.0161290322581 0.063 102.2M
TOU TLOU ENERGY -0.186046511628 -0.429347826087 0.105 43.0M
OEL OTTO ENERGY -0.190476190476 0.342105263158 0.051 97.3M
JPR JUPITER ENERGY -0.208955223881 -0.47 0.053 8.1M
PCL PANCONTINENTAL -0.25 -0.4 0.003 13.5M
FPL FREMONT PETROLEU -0.25 -0.571428571429 0.006 5.2M
BAS BASS OIL -0.25 -0.25 0.003 7.8M
BRU BURU ENERGY -0.260273972603 -0.0847457627119 0.27 118.8M
ABL ABILENE OIL AND GAS -0.285714285714 -0.615384615385 0.005 2.0M
WEL WINCHESTER ENERGY -0.297297297297 -0.74 0.026 7.4M
BYE BYRON ENERGY -0.324675324675 0.793103448276 0.26 186.5M
TMK TAMASKA OIL & GAS -0.333333333333 -0.333333333333 0.002 3.9M
LKO LAKES OIL NL -0.333333333333 0 0.002 45.4M
EXR ELIXIR PETROLEUM -0.350649350649 -0.166666666667 0.05 12.7M
KEY KEY PETROLEUM -0.363636363636 -0.125 0.007 9.4M
TPD TALON PETROLEUM -0.4 -0.4 0.003 3.8M
FDM FREEDOM OIL AND GAS -0.47619047619 -0.0833333333333 0.165 188.5M
88E 88 ENERGY -0.487179487179 0.0526315789474 0.02 115.5M
EEG EMPIRE ENERGY -0.5 0.133333333333 0.017 39.3M
RAW RAWSON OIL AND GAS -0.555555555556 -0.375 0.02 2.3M
WBE WHITEBARK ENERGY -0.571428571429 -0.75 0.003 4.7M
TNP TRIPLE ENERGY -0.604166666667 -0.830357142857 0.019 919.3k
BUL BLUE ENERGY -0.621428571429 -0.678787878788 0.053 65.8M
RRS RANGE RESOURCES -0.75 -0.666666666667 0.001 8.5M
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