WTI $102.13 -$2.24, Brent $109.27 -68c, Diff $7.14 +$1.56, NG $4.74 +4c
The differential suddenly opened up yesterday for a couple of reasons. Brent has stayed firmer than it should as the Ukraine crisis continues but there is little support for WTI especially as the May contract expired last night just after the inventory stats came out from the API. Once again Wall Street’s finest got the number wrong and the build of 519/- barrels was not as bad as the forecasts of +2.3m but it still left stocks close to record highs. Indeed, higher imports and continued building of domestic output has raised gulf coast stocks even higher. Interestingly gasoline stocks fell by 3.4m (consensus 1.7) showing greater than expected driving heading into the Easter weekend and now only a month until the driving season.
Todays company analysis is almost entirely focused on the service companies who have all sorts of announcements but it does emphasise the point I have been making for some time about the positive nature of the sector, virtually none of these companies have anything bearish to say.
BP has announced a ‘streamlining’ of its interests in Alaska including four operated interests. This amounts to around 15% of net production and is just a bit of tidying up to be frank.
Judge Barbier has set the date for the third and final penalty phase for the Macondo hearing, it has been delayed due to submissions but will now run Fromm 20th January to 5th February 2015.
The figures beat the whisper, coming in at 16 cents versus expectations of 14c and despite the bad weather things here at the land rig giant things are looking up. Following on from the last three service majors, Nabors also forecast improving conditions in the US onshore market and the share price, like the others, rose to new highs.
Baker Hughes/Aker Solutions
There has to be some amusing headline about the Baker/Aker deal but it does look eminently sensible. The two companies are forming an allegiance to develop subsea product solutions in order to boost recovery rates at offshore fields as well as to try and limit costs in the new, deeper discoveries.
A short IMS from Amec this morning and a short conference call to go with it. Nothing much has changed since the results and there isn’t anything to add about Foster Wheeler either. Trading is in line with expectations although you could infer a slight decline in margins and of course the strong pound is hitting numbers but only in translation. Order intake remains strong and the book remains steady at £4.2bn and forward visibility is ‘good’. Amec is trading, like other service companies, near its high as orders are prolific and capex discipline hasn’t extended much further than BP and Shell so far and the call on this one is all about FW which wont be obvious one way or another for a little while.
Another contract for Kentz, this time from one of its oldest clients, Fluor who have been on the order book for over 35 years. This time it is a $125m reimbursable contract in Kuwait for the Fluor Kuwait Company themselves acting for the Kuwait Oil Company. It is a multi-disciplinary technical and supervisory personnel offering for Fluor’s ‘supplementary manpower requirements’ and will last for five years.
A contract today from Cape through its Cape Hong Kong Fuji operation which sounds funnier than it is. This is a contract with a ‘major power supplier’ for provision of safe access services and associated services whatever they may be. No size indicated so probably modest but as you know I have turned much more bullish on Cape as I think it may have turned the corner and Joe is still driving which is what I was most concerned about.
Yet another order for POS-GRIP as new client Galp Energia joins the list providing revenue immediately for Plexus this time offshore Morocco. The best news for Plexus is that the Rest of the World business is growing rapidly, in the first half of this year it is 50% of business compared with 28% this time last year. Plexus remains a favourite.
It was a bit of a bore draw in Spain last night but a worthwhile result for Chelski as they should win at home although they haven’t many fit or undisciplined players left. It was a huge result for the HubCap Stealers who will run around the Chelsea 2’s on Sunday.. Tonight should be more fun, Real vs Bayern, proper football.
Congratulations to Leicester, Championship winners and looking forward to the Premiership next season.
Don’t worry about David Moyes, he’s already got a job with Sky…………………..He is fitting his first dish tomorrow….
Have a Happy St Georges Day!