WTI $97.41 +$1.69, Brent $107.41 +72c, Differential $10.00 -97c, NG $5.03 +19c
A lot of contributory factors to the oil price at the moment which have in the last 24 hours turned a bit more positive albeit fairly modestly. The decision of the FOMC on tapering due tonight will be crucial, it seems as if the $10bn figure will stay but the market will look hard at the statement to see if any economic data is weakening or if there are any worries about the recent emerging market grief.
The API inventory stats last night showed a build of 4.75m barrels against consensus of 2.3m, not bad by their low standards and the distillates draw was not as bad as expected coming in at 1.8m barrels against forecasts of 2.4m.
Its a quiet newsday so I thought I would mention a few facts from the IEA report out recently mainly looking at the US. We know their first conclusion that is that the US is now producing at over 8m b/d as it did in November and December but the consumption numbers look more interesting. US oil consumption is up 2.1%, 390/- b/d to 18.9m b/d which added to the increase in demand from the non-OECD countries backs up my views on oil demand. 2014 will be the first year that those non-OECD countries consume more than the OECD, with demand from China and Brazil up 30% and India 17% since 2007. The USA therefore despite now only consuming 21% of the worlds oil (!) against 25% in 2007 are still taking twice as much as China which is growing fast, I rest my case!
Shell- January sales continue
The sales continue at Shell as BvB gets out the special offers, today sees the sale of a 23% stake in the Parque das Conches licence offshore Brazil to Qatar Petroleum for $1bn. The company has also put up for sale its stake in the HOHO pipeline in the US with a price tag of another $1bn. Lots more to come and apart from Nigeria I would expect the Woodside stake to be next up. Figures tomorrow but well telegraphed at recent profit warning, Conoco and Exxon tomorrow as well.
A J Lucas/Cuadrilla
As you know I always keep an eye on A J Lucas as it has such an interesting play in the UK shale industry via its stake in Cuadrilla as well as licences alone. Last night saw the resignation of the long time CEO, Allan Campbell and there is no indication that it was expected, after 19 years in the job something has happened and the appointment of an interim CEO indicates that this was not expected. Maybe there is a clue in that in the same announcement Lucas announced that they were putting two directors on the Cuadrilla board namely their Chairman Phil Arnall and Ivor Orchard who is the Chairman of Kerogen Capital and a very smart guy, interestingly he was on my panel at the Capital markets session of the Oil Council annual forum in London last November.
Another change at Board level at Longreach as CFO Jonathan Morley-Kirk appears to have, like most of the rest of the Board, been on the receiving end of the new investors wrath and relieved of his position. In his place is Martin Arch which is going to make everything better, sic. If you get any vertigo don’t look at the Longreach chart and the aforementioned investors who have taken over here don’t appear to be making much of a job of it…
I am scheduling a meeting with Hassan Hassan of Simba, a company I have been watching for some time as it gas a most interesting portfolio of assets in Africa. Today they have announced that they have farmed-out up to 45% of blocks 1 and 2 in the Bove basin onshore Guinea to a Calgary firm, recently they farmed-out 40% of block 2A offshore Kenya so things are happening at Simba, worth keeping an eye on.
Last night saw the HubCap Stealers pretty much destroy Everton in the League whilst Man Who played Mata, Van P and Wazza in the defeat of Cardiff. Tonight Spurs take on the noisy neighbours, wasn’t that a cricket score last time? And the happy Hammers go to Chelski.
England’s women have won the Ashes, without any traumas, spinners walking out half way through or the captain blaming the best batsman. Many congratulations and I hope they go out and have a Flintoff-esque night out!
I’ve not looked at the men’s T20 but I heard that they dropped Stokes…?
In business two things, if you own Sainsburys be very afraid as the departure of Justin King is something to lose a lot of sleep over, if its anything like what happened to Tesco post Leahey then it might be carnage..
And as Ed Milipede gets his speech on the banks ready for Friday he should reflect on what’s going on in the real world of banking. He plans to make the banks sell off their branches and get more competitive well Barclays are closing down 25% of theirs voluntarily and between them and Lloyds in the last two days they have laid off 2,500 staff, bring on the two new banks EM wants to start up!