WTI $104.92 +$2.33, Brent $111.20 +$2.13, Diff $6.28 -20c, NG $4.49 -12c
Apart from goings on in the Ukraine, influences on energy prices are actually few and far between. The prices above are last nights close and this morning oil prices have actually drifted by around a dollar or so as traders appear to have only seen sellers at the higher levels. Inventory figures tonight might see a distillate draw again, gasoline prices have risen this week on good demand. The natural gas market is also under little pressure, in the UK the price bounced sharply yesterday from 56p a therm to 62p but today it is half-way back at 59p.
The question most asked yesterday was how much the situation in the Ukraine would affect supply of gas into Europe and if the Russians could increase prices at all. Well, if anything this situation has come at a good time for European consumers, after one of the mildest winters on record gas inventories are still showing 49% full compared with 35-40% normally in place on 1st March in previous years. This is where Europe has an advantage over the UK, they have, like the US, a policy of storing natural gas in the warmer summer months in order not to be short come the winter. In the UK, successive Governments have totally ignored energy policy – across the board, even recently, Centrica had to shelve a storage project as there was no help from the DECC. This must be the ‘repairing the roof’ policy that I hear so much about…
BP has lost its appeal in the US courts whereby it was attempting to halt the payments from the Macondo Fund as it believed that applicants were not always genuine. It is unlikely that BP will let this rest and although the legal costs must be simply mind-blowing, the management is in that frame of mind not to let go and after all, its not their money they are blowing is it? On the buy back front it is noticeable that the daily level has started to drop sharply, from around 7m shares a day in January the number is now about 1.7m a day and this year they have purchased 208m shares back. News from the BP analysts briefing tomorrow if there is anything to report.
Ophir has bought a 75% operated interest in blocks PEC-5B/1 and 2 offshore the Seychelles in the Indian Ocean from WHL Energy the Aussie explorer. They are paying $4m of costs and are funding the acquisition of 1,500 square metres of 3D seismic, in addition they will pay further costs if they elect to retain the asset post mid 2015. This seems pretty sensible but is hardly likely to make a whole lot of difference to the value of the company which in my view is significantly higher than at present.
MOG vs Leni
The case starts today in the High Court, Queen’s Bench Division, Commercial Court between the above. The case should last 6-8 days and is of significance to both sides, investors should be aware that prices will be more than usually volatile during the process and its not worth trying to second guess the decision even if you think you know!
Floyd Mayweather has announced that instead of fighting Amir Khan he will take on Alan Pardew at the St James’s Park/ Sports Direct/ Land of Leather Stadium in May, certainly Pardew probably wont be seeing the inside of the stadium for a while, he might as well go and have a drink with Roy Kinnear…
Graeme Smith has announced his retirement from international cricket, funny that half way through a test match he may well lose…Talking of odd decisions, Andy Flower has been appointed Technical Director of Elite Coaching at the ECB, how quickly we forget, all we need now is the King of Spain to be crowned Coach of the test team…
Trembling with excitement ahead of the football friendly tomorrow night at Wembley, how many from the squad of 183 who won’t go to Brazil might Woy choose from?