France, BP, Sound Oil, Global Petroleum, and Barclays

WTI $105.84 -48c, Brent $108.53 -12c; B/WTI Diff $2.69 +44c, Natural Gas $3.67 n/c

Good morning

It’s a very quiet morning, a few snippets but not much to get ones teeth into. Ben B is testifying to congress today and tomorrow so the markets think we will get some clarity on tapering and how the economy is recovering. If you look at jobs or the housing market it looks pretty good but elsewhere I get the impression it’s not quite so clear cut. The energy sector doesn’t help much, demand for gasoline and diesel has picked up a bit recently but last night’s API numbers showed a big increase in gasoline stocks as refiners crank up capacity.

In the UK, the BBC, in its evening news programme, has been doing a series of reports from the USA on oil and gas which has been remarkably interesting and unusually, short of anti-business bias. I hope the reports are put together somewhere and can be viewed.

Oil Price

The API inventory figures already mentioned if anything, brought the market down a little. The crude draw of 2.6m bbls was higher than forecast (2m, well within analysts tolerance levels!) but not as high as in the last fortnight which mean that the pressure is off WTI a touch, if the EIA numbers concur tonight we might just ease off a touch.

The Brent August contract closed last night and first impressions are that rollover wasn’t huge, initially. There is a large open position built up mainly on the back of political worries and some Opec countries under producing at present but longer term fundamentals aren’t quite so rosy and traders may be taking a few profits here and there.

France

In a remarkably candid interview President Hollande has said that ” as long as I am President there will be no exploration for shale gas in France”. That’s that then, the nuclear industry safe for another few years! Not sure how helpful that is for EGL or Egdon

BP

BP seems to be in the news every day with stories about the compensation payments post Macondo. Saturdays FT had a good article in which Ed Crooks suggested that ‘ it may turn out to be one of the most expensive legal slip-ups in corporate history’ rather confirming my view that the BP legal department has been plagued with costly errors for the last three years. Today Tim Webb in The Times has discovered that claimants are using new software that allows litigants to work out the maximum possible claim against the Group, an “OilClaim Calculator” as it is known.

Yesterday it decided to fight back and in an attempt to bring forward whistle-blowers it launched an action line 1-855-NO-2 FRAUD which I imagine will sort out all their problems at the drop of a Stetson, I wish I was that brainy to have thought of that one.

Sound Oil

Sound Oil has announced that it has made a gas discovery at Nervesa in the Po Valley, Italy which although still to test has shown a lot of net pay. The key thing here is that whilst a comprehensive technical review is needed to assess the size of the discovery ‘ it appears sufficiently large to deliver important cash flows and provide funding alternatives for the 2014 drilling programme’. I reached out to the CEO, James Parsons this morning and this discovery is critical to the strategy for the company in that either through RBL or even a farm-out (Sound has 100% of Nervesa) the company will remain well funded and its drilling programme will not be at the mercy of providers of equity.

We saw Sound recently and were impressed, it has a policy of broadening the portfolio across Europe and the Mediterranean (you know I don’t like Italy!) and although it doesn’t have much in the way of institutional holders it probably should have. I remain positive and would advise a closer look.

Global Petroleum Limited

I spotted an announcement this morning from Global Petroleum that said that its Chairman has resigned from his position and also from the board. Dr Robert Arnott, a highly respected board member across the industry will, I’m sure be in demand from many companies.

Barclays

It never rains but it pours for Barclays, having been fined £290m in Liborgate they have now been fined $470m by FERC for alleged manipulation of power prices in California and other western states in America. Barclays have just appointed a new Finance Director from JPMorgan Chase Investment bank.

And finally…

Wayne Rooney has been left ‘angered and confused’ after new manager David Moyes stated the obvious by saying that Van Persie was his first choice striker. One good way of getting a £250,000 a week second string striker of the wages bill I suppose…..Chelsea have apparently offered £10m plus either Juan Mata or David Luiz which United have rejected…..For that I would bite their hand off!

The FA Cup is coming home, home to the BBC that is after ‘aunty’ found some cash under the sofa and signed a four year deal starting next season.

Chris Froome continues to do well with a lead of 4m14s despite the pathetic attempts of Alberto Contador to take him out round the corner………………..

I need somebody to try to explain Bitcoin to me, when I read in the FT today that those two jokers were trying to make it an ETF I thought the world had gone mad, do they think people were born yesterday? There again, if people believe the Winklevoss’s claim that authorised participants will “have an opportunity to realise a riskless profit” then they are a whole lot more stupid than I thought they were!

I’m not here tomorrow so my first Open golf blog will be on Friday and I will provide a match report from Lords as well!