WTI $100.27 -70c, Brent $106.51 -$1.21, Diff $6.24 -51c, NG $3.79 -4c
A late blog today and just my luck to have a shedload of results to talk about! I will cover all I can briefly so this goes out before dark and add some more tomorrow.
The oil price is certainly not worried about any Geo-political concerns, either of sanctions on Russia or problems in Iraq or Gaza. Opec exports last month showed yet further growth and this at a time when the Saudi’s are a bit stretched in terms of being able to export during summer months, as the autumn gets closer there is little sign of panic. In an interview I did with IG yesterday, (link & details below) I add a bit to my views about the current very interesting cross coming up on the oil price charts which may well lead to a breakout one way or another. For choice the downside looks the better bet at the moment.
Economic news from the states yesterday was all about GDP, with the number being 4%, well above the 3.1% estimate, one should get all bullish but the EIA stats showed a crude draw of 3.7m barrels and more worrying was the continued high levels of gasoline stocks. The crude number was nearly 3m barrels higher than expected as the refineries continued to draw but the punters are yet to get through the gasoline stocks they are creating.
Results today from Shell which were above market expectations at $5.1bn after a billion bucks of extra charges into the bargain. I haven’t yet managed to access the call but if anything pops up I will add tomorrow. You will know that I put Shell out as a buy on the day of the profits warning back in February which has been most propitious, I still think that they are showing that BvB’s actions are differentiating them from the crowd and will continue to do so for the time being. BTW it is worth noting that the Woodside vote on the buy back is tomorrow and spies tell me that it is a bit close for comfort.
BG Group also announced results this morning and whilst at the moment figures are hardly what the market is concentrating on for BG it was a mixed set of numbers. Overall the results were fine but like going to a fancy dress party it was difficult to tell who or what was behind the mask. I think that there was another production warning slipped in there, E&P was down 10% and with UK maintenance delayed this year that should have benefitted the number although flow rates from Brazil were better as well. I know I go on about LNG but this quarter showed a 44% increase, with added cargoes and better realisations both contributing to the party.
BG is all about how much really is up for sale, it would be a bit of a waste of time and money if nothing major league happens in the post-Finlayson era, more comment after I have listened to the conference call.
So what on earth has been going on at Afren then? CEO Osman Shahenshah and COO Shahid Ullah have been suspended pending investigation into ‘receipt of unauthorised payments for their benefit’ which apparently didn’t come from the company. Cue schadenfreude all round as the industry waits to find out quite what has been going on…
Some good news from Gulfsands today as they announce that the Lalla Yetou up dip well in the Rharb permit in Northern Morocco has come in nicely, flowing gas to surface at 6.6 mcf/d. Readers will know that I turned more positive on this stock in the second half of last year having been a bear for a long time. It looks like an interesting if slightly high risk bet, nothing more but great news for the company today.
I fear that I have done something to upset Weir Group as I have not heard from the company for some time and didn’t get an invite to the meeting or conference call today. Shame really as having been a long term bull I would have liked to find out what went wrong with these figures which rather disappointed the market. As a bull I suspect that part of the miss was down to currency movements but they did mention ‘challenging conditions in the mining industry’ which I hope to delve into a bit deeper when I can. Unless there is a problem, which I doubt, I would take the 3% fall as an opportunity and the only other potential banana skin is on the corporate front where they are linked with every acquisition in town.
A big results day today in the US with a number of major and less major companies reporting. Exxon proved that you really do have to blow the doors off to satisfy the market as they smashed the whisper of $1.86 with eps of $2.05. This was all about production numbers which were down 5.7% at 3.84m b/d the lowest number for five years, the market seemed to forget that on this fall the E&P earnings were up 25%! For their sins they have been marked down 2% but memories are short and the shares are, to be fair, right at the top of the range for as long as anyone can remember.
ConocoPhillips also cruised past analysts consensus of $1.60 reporting $1.67 and this time production cant be blamed as it rose 6.5% ex Libya.
Former family, Phillips 66 found going in the downstream fairly hard going and reported numbers down 9.9%.
As promised I am giving a couple of links to interviews I was involved in yesterday. I had the great pleasure of interviewing Phillip O’Quigley, CEO of Falcon Oil & Gas in my series of CEO interviews for TipTV which can be viewed here.
I also spent some time with Jeremy Naylor over at IG, we talked about the position in the crude oil market as his chartists see a breakout coming, just not sure which way.. I also managed to talk about Iraq and Gulf Keystone which has hopefully now seen an end to the fighting, at GKP that is…. After that I had some pretty aggressive things to say about Tangiers who have asked for a trading halt as the TAO-1 well is about to deliver a result in the primary objective, after the recent fall they need this to come in…finally I talked about Sound Oil which you know I like and managed to call it cheap as chips and had a quick chat about BP as it comes to terms with sanctions.
As the C Games draws to a close it was great to see Greg Rutherford back to his best winning the gold last night…
Its already the football season and has been for a while in European pre-qualifying stages. Last night Celtic went to Legia Warsaw and lost 1-4, a mountain to climb, will they still be playing at fortress Murrayfield for the second leg I wonder? Good luck to Saint Johnstone tonight and of course Aberdeen are playing as are Hull City Tigers who are away at AS Trencin wherever that is…
Elsewhere Lukaku has signed for Everton for toffees, or is it signed for the Toffees for £28m?
And the Premier League are going to use the vanishing spray for free kicks next season, good luck to referees on that one…
And England square the test series with a comfortable win at the Rose Bowl, good thing they have six days until the next test in Manchester as it might take them half of that to get out of the ground…