WTI $48.79 +14c, Brent $50.96 -19c, Diff $2.17 -33c, NG $2.93 +6c
Traders tell me that crude markets are quiet with index re-balancing ongoing and fundamentals still overwhelmingly bearish. Having said that the tanker market continues to tighten as supplies build up in a contango market. I have read press comment about a leading US investment bank suggesting that the Saudis will have to capitulate soon, not something that i feel is at all likely at the moment, if the pain is going to work it has to be given a chance.
I mentioned in an interview with IG Group at the time of the Opec meeting that this policy might lead to the ultimate break-up of the cartel, yesterday a Gulf source was quoted as saying to the Saudis ‘you are at war with us’, I suspect that they might have factored this attitude into the process when they initiated it.
Today is non-farm payroll day and the consensus is for 240/- new jobs, a figure above 200/- for another month would be the first time for many years. Finally, the Keystone XL bill was approved by the Senate Energy Committee yesterday, after being passed-again- by the House of Representatives today it will go to the full Senate next week. Barry’s men say that he will veto it if it goes to his desk and democrats who are supporting it are allegedly insisting that it is made of US steel and that they will prevent oil from it being exported. This is rather disingenuous as they should be reminded that oil in the Keystone XL pipeline will have already been exported from Canada…
Petroceltic- The natives are getting restless…
Another day, another significant minority shareholder loses patience and starts proceedings to change the board. Below I will talk about another similar situation but at Petroceltic, Worldview has requested an EGM to remove CEO Brian O’Cathain, apparently for the failure of the Dragon Oil takeover but it is also widely reported that they weren’t delighted to see him trouser a sizeable bonus a fortnight after the bid lapsed. Pronunciations from Worldview have rarely been, how you say, consistent having recently attempted to take action because Petroceltic didn’t hold a Capital Markets Day during a bid situation showing a rather significant slice of ignorance of the regulatory process.
When the oil price falls as sharply as it has done there are always casualties and we now have at least three examples of significant minority shareholders trying to shake things up. Range, Gulfsands and Petroceltic will not be the first to hear the wrath of its part owners nor will they be the last, as usual with major shareholders one should be very careful about what you wish for…
Circle Oil has announced that has received a $15m ‘special payment distribution’ from the Egyptian Government recently which has ‘significantly reduced the outstanding debt to the company’. Clearly this is good news for Circle and indeed following recent announcements from BG, leads us to believe that the country is slowly restoring its credentials in the international oil market.
Circle has a modest part to play in the ongoing shenanigans over at Gulfsands where another significant minority shareholder is trying to oust part of the board. I’m sure next week I will be reporting on this situation but the value attributed to Gulfsands is a fairly good read through from Circle. If you attribute no value to acreage in Syria, as I do, then apart from Columbia, Morocco is the only part of the equation with any value. Circle however, are well ahead of GFX in the country and indeed have the infrastructure in country which GFX has not, at least yet.
Back to Columbia where GFX has formally announced what was widely know that it has put up for sale its assets in the country consisting of two blocks, Llanos 50 and Putumayo 14 awarded in 2013 at reasonably low ‘X Factor’ participation fees. This is where Amerisur comes in as Putumayo 14 is close to the Amerisur Platanillo oil field and apparently ‘highly prospective’, time will tell, if anyone knows the value of these assets it will be John Wardle.
Next week we will find out what the activists at Waterford are up to and soon after that the plans of Worldview, whatever happens there may be ‘under new management’ signs up and probably either asset sales or wholesale break ups of these companies, as I said before, definitely not the last.
Novak Djokovic was surprisingly beaten yesterday in the quarter finals of the Qatar Open by Ivo Carlovic, with Rafa losing twice in a week might we be seeing a change in the world tennis order? probably not….
A good weekend for Premiership rugby with Gloucester hosting Sarries, Wasps at Bath and an old favourite, Quins v Leicester.
In the footy there isnt a stand-out fixture, Chelski get a chance to get revenge against the Magpies as do the Gooners v the Potters, the Hammers go to Swansea, under Alan Pardew the Eagles host Spurs and the Saints go to the Theatre of Dreams…elsewhere the Maccams host the HubCap Stealers and the Noisy Neighbours go to the out of form Toffees.