WTI $60.34 -82c, Brent $60.22 +1c, Diff $9.88 +83c, NG $2.95

Oil price

With such little company news around I wasnt going to do a blog today but there a few things going on with the oil price worth commenting on. The prices above reflect Friday’s news and of course include reaction to the rig count numbers which disappointed some of the bulls. On the macro side there appears to have been a very weak deal done between Greece and its EU lenders, it appears to me that Wolfie has kept all the high value cards and although the short-term deal may have been done, the long term still looks decidedly uncertain.

It hasn’t gone unnoticed that the WTI/Brent differential has crept back up to nearly $10, normally time to take action but times are not normal. Whilst it is perfectly possible that it will fall back again it should be noted that a combination of events may clog up the WTI market and not that of Brent. Those rig numbers I mentioned, albeit for only one week, showed the smallest decline this year at 48 rigs, 37 being oily. Add to that the fact that the refinery strike is gaining ground then we are likely to see higher stock levels at both Cushing and the Gulf which should put pressure on to WTI. Commentators in the US are suggesting that around 17% of refining is now off the market, a figure that will surely grow if no settlement is reached, further hitting throughput.  Add to that the seasonal refinery maintenance programme and severe weather hitting product demand and you get an overstocked market which leaves oil with no place to go…As I write WTI is $48.72 and Brent is $58.47…

Tower/Premier/Taipan

Sometimes you get an unnatural feeling about a well and the vibes around the Badada-1 well onshore Kenya have not been good from the start. It was announced this morning that the well was a duster and although there is the usual dressing up of a dry hole, it doesnt look good. The partners in this consortium have in my view very differing agendas and the views on what constitutes success and therefore putting more money in are less obvious at $50 oil, watch this space…

Gulfsands

On a pretty mixed day for oil shares the Gulfsands price has been chalked up by just over 3%, this reflects the fact that while the gas discovery on DOB-1 is indeed a good one it may not be that relevant to the future of the company. Even if you leave aside the recent shenanigans by the warring shareholders (and that’s a pretty big ask) you are still left with a company with three assets, one is worthless for the foreseeable future (war), one has the ‘For Sale’ boards up (in Colombian) and the final one still dependent on cutting a deal with Circle Oil. (Itself not yet under new management). There are a number of scenarios that could mean that Gulfsands looks incredibly cheap but I cant see it myself, at least not until the management come out and say exactly what is the plan and at the moment i’m not sure they know it themselves.

UK Onshore

Europa Oil & Gas has announced that it has spudded, along with Egdon and Celtique, its Kiln Lane-1 exploration well. Not involving shale or fraccing this should be another straightforward oil well a lá Wressle and if successful will be a useful, if not game changing discovery. For EOG and EDR this will be good but there are bigger fish to fry, for the former it depends on Kosmos, for the latter more movement on UK onshore unconventional activity which is rather pedestrian at the moment but not without plenty of upside.

And finally…

At last a win for England at cricket even if wild celebrations indicated a win over a team other than Scotland. An unchanged team winning will mask the problems that are primarily that Ballance isnt a one-day No3, Hales is wasted on the subs bench as is Tredwell and Taylor ditto wasted batting at six, oh well Sri Lanka next…

The weekend’s footy was very mixed, Chelski for once were vindicated in being angry at a lousy ref, the Noisy Neighbours took advantage of the situation to bury the Magpies 5-0, it might have been many more. Swansea did the double over Man Who who have been riding for a fall lately and the HubCap Stealers went to the Saints and lifted all three points. Spurs are having a very lucky run, yesterday they got a 90+5 pen as Harry K flung himself to the floor and he equalised from the spot-just, unlucky Hammers this time.

With Mayweather and Pacqiao announcing their long-awaited bout the match of the century so far has now been made and all for $300m and rising…

Italian prop forward Martin Castrogiovanno frightens may opposition front rows but not a friend’s small dog it seems. Having been playing with said pooch it, like may props around the world took against the hairy one and attacked him leaving the big fella in hospital needing 14 stitches on the fireman’s hose…

And well done to Eddie Redmayne for winning his Oscar, as often said around here he is an honorary member of the oil and gas fraternity down to his dad whom many people have worked with.