WTI $101.83 -99c, Brent $109.51 -$1.13, Diff $7.68 -14c, NG $5.10 -35c

Oil price

Its past 3pm so a very quick blog, a few one liners, I have been at company meetings and will add more tomorrow if appropriate.

The oil price fell a touch yesterday, I’m told Brent was all over the place and WTI better ahead of the inventory stats. The big thing I see right now is the announcement from PM Abe in Japan that ‘nuclear power is an important baseload electricity source’. Three years after Fukushama and with the electricity bills through the roof owing to dependence on LNG and oil, Japan has decided that not only is that cost too high but the cost of demobilising 48 nuclear power stations is rather expensive too. Before the F day Japan’s nuclear stations provided 30% of power output with plans to go to 50%, might this take a bit of pressure off oil demand a bit further down the road?


Finals from Petrobras no great surprises as Net Income was down 19% and like other supermajors they have cut $16bn from their capex budget.


Having had a p/w only recently, these numbers again came as no surprise although having posted a number of contracts already this year there was certainly a more relaxed feeling from AA. To judge PFC I think that one must try and look ahead, this year will be ‘flat to modest growth in net profit’ and 2015 should show ‘ a return to strong earnings growth’.

I think that Ayman was in a much more positive mood at the meeting this morning and that is not just in the prepared stuff but in the way he answered the challenging questions. As an engineer he doesn’t always say what the teenage scribblers want him to, (although Petrofac boasts a much more mature, refined type of analyst) and accordingly sometimes  gives the wrong impression, today he was positive in a reassuring sort of way I thought. He and Petrofac have suffered a couple of unusually poor years by their very high standards and I think they are behind him. An example of this is in the way IES contracts and growth may happen. Rather than say that they are going to go for a massive increase in the order book, he explained that in the areas they already worked in, like Mexico for example, the company would deliver perfect contracting and this would secure more work in an environment they know.

The 2015 earnings target has been dropped, no one wants a millstone like that round ones neck but I for one wouldn’t rule it out, like Frankel, Petrofac is rarely headed and remember those margins are the envy of many. The shares are £3 off the bottom but I would think that for the long term this stock still offers great quality and equal value.

Weir Group

Another blog favourite out on the same day and it would be nice to think that the bears and shorters might have been burnt a bit by the 7% rise in the price post the figs. Keith Cochrane described 2013 as a ‘challenging year’ and like Ayman he is probably feeling much better and equally optimistic for 2014 and 15. In these figures he described minerals as ‘positive’ and offset that challenge.

In a very positive meeting I thought that the most interesting stat was about the aftermarket for Weir which Keith described as ‘robust’. I would say that a 16% increase and double digit revenue growth ticked that box and with record operating margins and now representing 63% of all revenues I am very happy. Price wise we are now in roughly clear blue water above the £24.79 resistance and like I called after breaking out before I see no reason why the shares shouldn’t continue to go higher, again, the risk here is not owning Weir.

A J Lucas

Just two days before the results are due AJL came up with a profit warning today. Saying that there was ‘less work than previously envisaged’ and with some delays occurring, the numbers would be sub expectations. I understand that Lucas is preparing for a dual listing so the recent fall in the share price is either a disappointment or an opportunity depending on where you are coming from…


I have to stand corrected as I got a number of comments on the article I recently wrote in the blog about MOG. I accept that I totally forgot to put anything in about the imminent court case and whatever you perceive the risk might be it should, without doubt be part of your thought process, points well made, apologies!

And finally…

After last night dismal performance from Man Who, David Moyles took the blame but apart from the last 15 mins it was the players who were pony. Cleverly, I need say no more but Gillingham is probably too good for him.

Still on football, my spies tell me that Pepe Mel is v close to the old ‘tin tack’ at the Baggies after only 6 games in charge. I hope this doesn’t happen but you will remember that I said at the time that he had had the sack more often than a Christmas postman and wonder how these football club boards make these decisions and hire serial losers? (Oops, Moyles has never won anything…)

Red Bull prepare for the final pre-season testing and I’m sure plenty agree that it would be good fun to see how good Vettel really is when not in a car 5 seconds faster than everyone else, I mean my mum would have won 5 titles in the old machine…

Muzza warming up nicely winning in the first round in the Mexican Open, he has got to do a lot of winning to get his ranking back remember?

And apparently RBS have secured permission for £500m worth of bonuses, am I dreaming or is this bank a total basket case that would be better off put out of its misery, not warming the wallets of useless losers?