WTI $60.94 -$2.88, Brent $64.24 -$2.60, Diff $3.30 +28c, NG $3.71 +5c

Oil price

Yesterdays fall was primarily down to Opec who said that on their latest figures 2015 demand was likely to be the weakest in 12 years. Their new number is 28.9m b/d, down another 300/- and piles pressure on an already fragile market. Kuwait didn’t actually help matters by offering the largest discount to its Asian customers since 2008 at  $3.95 per barrel less than Oman/Dubai quotes.

No wonder we are already hearing talk of an emergency Opec meeting, calls that will not be listened to by the Saudis or by the sounds of it, in Kuwait. The EIA inventory stats followed on from the API numbers in showing a crude build of 1.5m barrels vs a whisper of a draw of 2.6m, take a look at the product builds which totalled over 6m barrels, high even after under-reporting of the Thanksgiving numbers and record refinery runs.

Oil has rallied this morning, and is a good dollar up from yesterdays lows ($60.43 and $63.56) but there is no floor in sight and although the market will have good and bad days the bias is still down, a market made for the shortest of short term traders… I find it ironic that looking at market reports this morning that they are saying that ‘plunging oil prices are stoking worries about global growth’ as if the low oil price is necessarily a bad thing!

BP

I understand that BP held a meeting yesterday at which it said that there would be $1bn of restructuring charges and that they would cut development spending by $2bn next year, funny how the price of the commodity you work in concentrates the mind eh? Actually for BP its a bit like the advert where he says that its the burglars coming in through the window you need to worry about, with $10bn of asset sales already slated for next year and earmarked for share buy backs, paying the dividend may have to be done by finding other bits of the family silver to flog off…

Wood Group

A flurry of news today from Wood Group with a pre-close update, big contract from BP and a small acquisition in the states. On the trading front it’s more of the same, full year 2014 is in-line with expectations and will be up on 2013 and as before, WG PSN growth will offset engineering and turbine services. Looking out to next year they say that despite some operators ‘reconsidering’ spending plans they have a largely reimbursable order book, good prospects, a mix of opex and capex, long term contracts and a spread able to provide ‘relative resilience’.

The $750m contract from BP on their UKCS assets over five years, with options for two one year extensions is the largest of the year and comes at a good time and the modest add-on acquisition of Swaggart for $36.3m bread and butter for Wood. Whilst nothing can be taken for granted in this market Wood is showing some of that ‘resilience’ and like others in the service industry might just avoid too much of the fallout, lets wait and see.

And finally…

A good night for our clubs in the Champions League as the Noisy neighbours pulled it off with a fine win against Roma and Chelski franked their place in the next round. In the Boropa Cup, soon to be joined the the HubCap Stealers, Spurs are at Besiktas and the Toffees host FK Krasnodar.

The cricket has gone into a second day and England are doing a good job of chasing 239, 135-3 as I write.

And it seems like the grand fromages at McLaren have decided that they can afford to have two world champions driving for them next season and so the line-up is Alonso and Button which is good news for all except Magnusson…