WTI $107.26 +83c, Brent $114.81 -25c, Diff -$1.08, NG $4.53 -5c
The weekend saw further gains from the insurgents with towns and even airports being taken as the Iraqi army disintegrates. Despite having the income from 2.5m b/d of exports and 750/- b/d for internal use the country is bereft of trained men and what arms they had have been surrendered. As I said last week the oilfields and pipelines in the south are, as yet, untouched but many workers are being repatriated. The US has not yet said much but must be watching that area around Baghdad very carefully. Up north I am much more confident that Kurdistan is on the brink of near-independence as -whisper it very quietly- this state of affairs has created a game changing situation, there appears to be no going back now. (See article in yesterday’s Sunday Times who might have been briefed by same person as me…)
On the actual oil price front nothing much has changed, we are at or just below recent highs that are still well below what might happen should the worst occur. Rather then that the market still looks at fundamentals and economic statistics for guidance. At the end of last week both the US and China provided modest reasons to cheer, in the former, jobless claims fell, manufacturing expanded and leading indicators improved while in the latter factory data was good as orders surged. WTI rose on Friday as the July contract expired and Brent fell as Libya announced a very small increase in exports to 270/- b/d, this morning both markers are a touch higher.
Ithaca has acquired from Sumitomo increased stakes in the Cook, Pierce and Wytch Farm fields for $170m or $14.20 a barrel. ( $12 after tax allowances) The deal looks sensible and in-line with Ithaca’s policy of adding to long term reserves and building the business. There is one big unanswered question which concerns the Cook field, operated by Shell, in the current climate at The Hague this interest is clearly up for sale which now there is a value attributed may/should lead to a deal, perhaps Ithaca has only given us stage one of the announcement…? Production guidance from Ithaca has been raised from 11-13/- b/d to 13.5-15.5/- b/d but I think this is more about reserves than production. I remain very keen on Ithaca which is a big preferred stock and remains so.
Do I hear the sound of jittery Petrofac holders by any chance? Well maybe, as tomorrow it is time for the latest trading update from Jermyn Street and on recent form expectations are not high, at least not oozing with confidence. With the shares bang in the middle of the trading range its a tricky one to call but surely they cant have more bad news for us?
On Thursday its the turn of Wood Group where they seem to have got over the traumas of their profit warning(s) from the end of last year and whilst not quite at the pre-warning peak are in pretty good nick, a good statement and a break above 814p could see them back up over 900p, the resistance then is 915p.
The summer of sport just keeps on coming thick and fast and today in addition to the football and the cricket we see the start of Wimbledon where Brit Andy Murray is defending champion. As the roller-coaster of emotions erupt from SW19 over the next fortnight we will bring you all the oohs and ahs….
The World Cup continues, last night saw Portugal nearly upended by the USA and their striker Clint Dempsey or ‘the white Pelé as he is now known. Tonight sees the start of the final group games where advanced use of the remote control is required as games are played in tandem. Of the four matches today I can only see one real deciding fixture when Croatia play Mexico who can both still qualify. In the England squad Woy has said he is going to pick mostly players who haven’t played in the first two games, that is almost all of them then…And Steven Gerrard is quoted as saying ‘ I would like to take some time in the summer to consider my England position’, actually mate I think we all know what that is, i.e. ‘former England player’…In tomorrow’s game apparently Frank Lampard is going to be the Captain, so the armband will still be sponsored by Saga…
In the test match England managed to go past the Sri Lankan total and be 278-2, after that they added less than 100 runs to be all out for 365, four of the batsmen being out to a part-time bowler making up the numbers.
The qualifying for the Austrian GP looked quite interesting but Mercedes were only joking and finished with another 1-2, that bloke Vettel who all the commentators were telling us last year was ‘the best driver ever’ clearly were not aware that it was the car that did it…So not such a good homecoming for Red Bull who’s boss blamed it all on Renault as one does.
And the All Blacks reminded us all who really are the bosses on Saturday as they crunched their way past England pretty easily…