WTI $97.10 -74c ; Brent $116.30 +2.02 ; Natural Gas $2.58 +8c

Good morning

It will be a short blog this morning as I will comment in more depth on BP after the analysts presentation which takes place all this afternoon.

The oil price is in an interesting phase as whilst WTI falls due to crude stocks building at Cushing, Brent and other crudes are rising for many reasons recently mentioned here. An interesting headline in the FT this morning was “Italy hit by shortage of Russian gas” explaining that imports from Russia were down by 30% on normal levels. It is worth mentioning that there are many companies with acreage in Italy where there is a potentially substantial oil and gas industry but nothing ever happens as you can never get anything done in the country. If they pulled their fingers out they could end up not needing all that Gazprom gas!

Regarding BP, they have announced this morning profits dead in line with expectations after tax credits and an increase in the dividend. The company has said they are ‘returning to operational momentum’ and continuing with the plan to sell $38bn of assets and invest in deep water, giant fields as expected. They are also much more bullish on downstream than say, Shell or Chevron, which will be interesting to hear about later.

The Macondo trial starts on February 27th and I am still of the view that the company should, and will cut a deal before that starts, the company are keeping with the line that they will only settle if the deal is good for them, which is appropriate for when they announce it!

My views about the dividend are less positive but only in the sense of not running before one can walk. Despite the apparently positive mood I would have waited until after the settlement of the case before I increased the pay-out and as I have said before BP were paying out too much in dividends before Macondo and they are being a deal more optimistic about life than more solid industry peers.

In other company news, Tullow, Aminex and Solo have had a duster on their Ntoya-1 exploration well in Tanzania, not finding oil or gas in the depth they had expected.

A short blog today, I hope to have a much more significant BP update tomorrow after the presentation this afternoon.

And Liverpool vs Spurs last night? Watching it must have been very taxing…..