WTI $98.51 +1.17 , Brent $109.38 -1c , Differential $10.87 -1.18 , NG $4.24 +1c
Another day of WTI strength against Brent and the differential has now almost halved, a good trade which I might think about closing. WTI’s strength is primarily down to big stock draws in the last week added to the analysts inability to forecast it. Last night the API inventory stats did it again, drawing 7.5m barrels against a consensus draw forecast of just 3m barrels. Tonight sees the EIA numbers but I would be surprised to see much more WTI outperformance from here.
Chinese data I mentioned yesterday wasn’t too bad, oil demand grew November on October by 1.5% but year on year it was down 5.1%, these stats are notoriously inconsistent though and subject to all sorts of vagiaries such as stockbuilding.
Shell has announced that it intends to ‘triple its investment in the country’ post the YPF/Repsol deal, a strategy you will know I concur with as I do believe that slowly but surely Argentina is becoming investible. Recent comments about the Falklands notwithstanding, I expect companies that have invested in the country to be rewarded longer term, these include President Energy, Andes Energia and maybe even Kentz with the acquisition of Valerus being to an extent South America weighted.
The company has made its first entry into Malaysia with its purchase of the PSC on block PM322 in the Melaka Straits, offshore peninsular Malaysia. Discoveries have been made in the area historically and the CEO is confident that with a modest work commitment it might be a wise investment.
A couple of bits and pieces, I keep hearing that GE is re-warming its bid for Weir Group, I’m still a big fan and having seen activity from Kentz as well as rumours of a bid for Foster Wheeler I think that corporate activity in the service sector is extremely likely in the coming months. Finally I have been a huge bear of Essar for a while, the stock shows no signs of slowing its descent, not a time to try and catch a falling knife yet….
Last nights Champions League put Man U through as Group winners, hardly a breeze but maybe the best is yet to come, Noisy neighbours beat Bayern Munich at home and manager Pellegrino wasn’t aware that only one more goal would have seen them win the group. Tonight is pretty much dead rubbersville, with Chelski hosting Steaua and the Gooners a cert to qualify in Napoli while Celtic, already doomed at the bottom of the group finishing with an away fixture at the Camp Nou..
Its the BBC sports personality of the year on Sunday and it is noteworthy that Andy Murray is not planning to attend as he is in the states recovering from his operation, surely he is nailed on for this one?
And of course we couldn’t finish the and finally without mentioning our favourite bloke and last years SPOTY, Sir Bradley Wiggins who was knighted by the Queen at the Palace yesterday ‘just for doing a silly bike ride’!!