WTI $99.62 -12c. Brent $104.79 -83c, Diff $5.17 -71c, NG $4.36 +9c

Oil price

The oil price is falling again, particularly for Brent which is beginning to look a bit sickly and about to get worse as the Libyan situation develops. As written here, the rebels appear about to sign up to a deal with the Government that will open the ports and put 600,000 b/d back onto the market. Now I know we have heard this all before and we should believe it when we see it but this does look more than usually imminent and more importantly, deliverable. It is interesting that as the price weakens, Ian Taylor, CEO of the mighty Vitol, in a speech yesterday abandoned his bearish stance on the oil price, saying “to be honest the market does look balanced and I’m not sure its going anywhere” and he should know. I tend to agree and despite worries about crude supplies increasing here and there I still feel that demand is strong enough for pretty much anything that can be thrown at it. Iran again as mentioned here, is offering some tasty discounts to its major clients (China, India, Japan, South Korea and now Turkey) and is clearly exporting more than the 1m b/d sanctions agreement. It is also apparently finalising a deal with Russia for a $20bn oil for goods deal.

The differential is closing to almost $5 again, usually a sign to see it reverse as the EIA inventory stats showed a draw of 2.4m barrels against consensus forecasts of a build of 1.4m, as usual analysts not even close. In France President Hollande has appointed his ex-girlfriend Segolene Royal as energy minister as part of the cabinet reshuffle.

Wood Group

I jokingly said yesterday, another day, another Wood Group contract but woops, here comes another! The company’s JV in Kazakhstan, KTR-WG has been awarded a contract by the North Caspian Operating Company to its WG GTS division for critical rotating equipment for the Kashagan project in the Kashagan oil field. In the spiel it looks like there are a lot of gas turbines and a long contract to install maintain etc.

Northern Petroleum

A long-awaited piece of good news for Northern with an operational update from its Canadian investment. The ‘proof of concept’ well programme has been successful and the redevelopment of the Keg River formation in Alberta has successfully delivered three wells producing recoverable light oil. The wells are now on long term production test and with over 26/- acres and a STOOIP of 101 mmbbls the news looks good. More from Northern at figures later this month and as I say after Guyana and Italy disappointments they really needed some good news. I hope to have a long session with them after the figures and will report back.


Sinopec is on the move in a couple of ways and in both cases are raising cash for some reason. Yesterday saw one of the biggest raises in far eastern history as they issued $5bn in dollar denominated 3,5 and 10 year notes whilst also retaining G Sachs to sell up to 30% of their retail business to put another $30bn in the coffers, I wonder why?

Cairn has announced that it has been in communication with the Indian tax authorities about the year to 3/2007 in which it says it has filed a ‘nil tax ‘return. It has also been asked whether it should have withheld tax on dividends paid to the parent company which it also appears to have filed under nil.

Weir Group has entered into the Scottish Independence debate and like a number of other Scottish companies has said that independence is ‘substantially negative’ for its business and will see higher taxes, more costs and uncertain benefits. Weir, which is based in Glasgow and has a long and rich history in Scotland can now be added to the long list of businesses that may have to leave Scotland to protect its interests.

Chariot has announced that it has started 3D seismic offshore Morocco, this is not something I would normally mention as, like well spuds it doesn’t actually add much. However in this case it is worth noting that after the six weeks of working Chariot will have completely fulfilled all of its commitments in all of its Moroccan licences which is important to know.

And finally…

Not a good night for Chelski in gay Paree as they lost and take a 1-3 score back to the Bridge although it was the same score that they overturned against Napoli a couple of years ago and Zlatan has done his hamstring. The Chosen One was livid and left his strikers on the bench, (Torres and Ba have 14 goals from 54 appearances between them this season)   it was pointed out to me that why doesn’t David Luis play up front as he scored a good goal last night? Well done Netty, good thought! Gareth Bale the Spurs reject, scored as Real looked ominous against Dortmund.

Its the start of the Aintree Festival as its now called and I look forward to seeing The New One in the hurdle today after a massive disappointment at Cheltenham whereby he may well have won the Champion Hurdle but for interference.

And Alastair Cook says its only a matter of time before the truth comes out about English Kev, I wonder, do you think he means the truth that he was the top scorer in Australia or the truth that he is England’s highest ever scorer of runs in all competitions do you think?