WTI $74.09 -$1.69, Brent $78.33 -$1.35, Diff $4.24 +34c, NG $4.28 +13c
‘Twas the night before Opec and of course the market is none the wiser… As predicted each day comes with another series of ‘meetings’ real or imaginary and off-the-record briefings designed to put us all off the scent. Yesterday, the market having become more positive on Monday about some kind of a deal, reacted badly as spin that Saudi Arabia wasn’t going to play ball got into the market. The apparent real meeting was between the Saudis, Russia, Mexico and Venezuela which is quite a roomful if you know what I mean but not much came out except that ‘the market will stabilise itself eventually’. This was what pushed the market down as it came from the Saudi camp and was deemed to be in the ‘no production cuts’ area of the market.
So what to expect tomorrow? Well, we have had all the range now and as I said recently nothing counts in the run-up to the meeting, its what they say tomorrow that does and even that will need to be verified over the next few months. I would say that there are three meaningful outcomes, firstly that the Saudis decide to go for market share and there are no production cuts at all, in this scenario the oil price has no realistic floor but expect at least ten dollars off the price. Secondly, they maintain existing ‘quotas’ of 30m b/d but say something like they will enforce it vigorously, in that case the oil price will still fall maybe not as much as in scenario one. Thirdly, they decide to take the bull by the horns and say that for 1H 2015 they will stick to 29m b/d in which case there is likely to be a modest rise depending on the wording of the press release. All this on Thanksgiving when oil markets are either closed or worse open but unmanned, as the Cowboys take on the Eagles the wealth of Texas might be about to take a turn for the worse, delicious irony…The duration of the conference will be important, taking a long time will be a bad sign, at the moment there is a press conference slated for 1500 hours GMT so, assuming that goes ahead the market will have a couple of hours in London to digest it. If the decision is already made, and I strongly suspect it has, that conference will give us the result, if not it may be a long weekend as Friday and Saturday may be postponed for prayers, possibly to the God of crude oil…
I gave an interview on the possible outcomes tomorrow to IGTV yesterday, if you can bear it, here is the link.
IGas had interim results this morning and as usual for these companies the past really is history. The most important things for IGas shareholders are that the company has got an $80 work programme underway funded by its partners particularly Total, GDF and Ineos. The Ellesmere Port well has spudded and there are two more next year and the decision on what has been awarded in the 14th round should be known fairly early in the new year. The Dart acquisition completed after this period so the numbers for that are still being cranked but the more I look at that deal the more I dont understand why Ineos didn’t buy it, that was the no brainer of all time Jim….
IGas also took the opportunity to address the situation regarding CEO Andrew Austin’s shareholding in the company which has come under significant scrutiny recently, primarily due to unrelated action by such as Quindell. I hope that the explanation of the deal,whereby his holding in the company is used as collateral for a personal loan in a totally orderly manner and approved by the board can now put this to bed finally, certainly the rise in the share price today might have seen off a few short sellers.
BG have managed to achieve the almost impossible by getting a ‘red top’ notice from the IMA today, it looks like £14m a year is more than even some investment managers…
Trinity has sold its interests in the Tabaquite block to LGO for $2m, a non-core asset it seems like a perfectly sensible deal, I hope that this was not the reason for cancelling my meeting with the company recently…
And news in the trade press that SONA are still hopeful of completing their deal with Salamander regarding the 40% of the Thailand concessions seems a bit strange although if I was a Salamander shareholder I would be thinking that it wasn’t such a bad deal after all…
And following the Sound Oil ‘intended’ bid for Antrim I was asked when I was at IGTV yesterday to do an interview on that situation, again, if you can bear it the link is here.
A better night in Europe for British football as Aguero got a hat-trick in their win over Bayern Munich, no reason they cant qualify now…Meanwhile Chelski were cruising again at Schalke winning 5-0 any way you like.
Tonight sees the HubCap Stealers away at Ludo Razgd which at any other time you would put down as an easy win for the British side especially after not being so bad against Real last time but at the moment who knows, maybe a spirited performance can happen. The Gooners host Borussia Dortmund and again you would normally consider this to be a home banker but after last Saturday….
Dont ask about the cricket…………..England’s first one dayer against Sri Lanka is under way and the best news is that England won the toss, it may be the only thing they win as the home side are heading for 300 and the innings still has 4 overs to go! The most dispiriting thing was listening to Captain Cook at the toss, when asked why Hales (our best batsman in the party arguably) hadn’t been selected he replied that he wanted more bowlers in the team, well that worked didn’t it, how many would they have got without this fine bowling line-up?