WTI $58.98 +99c, Brent $65.03 +$1.01, Diff $6.05 -71c, NG $2.92 -3c
Plenty to talk about on the oil price this morning as oil and products held key support levels yesterday and kicked on, aided by the overnight API inventory stats and later the EIA numbers. They showed that crude stocks fell by 2.7m barrels, higher than analysts forecasts of 730/- whilst in gasoline, inventories drew by 2.8m barrels. On the evidence of May so far and numbers we can glean from various sources, we might be in a better supply/demand place than had previously been expected. The EIA report indicated that not only was US production 112/- b/d down but that demand was up 1.4m b/d at 20.23m b/d.
Another report worth taking a look at is the EIA one on downstream where they highlight the fact that margins are at ‘several year highs’. Their analysis of crack spreads show that with New York Harbour gasoline prices of $1.79 per gallon and Brent at the equivalent of $1.41 per gallon leaving a 38c/gallon margin, the highest April number since 2007. They also report that margins are high in Europe the Middle East and in Asia where demand for products, in particular liquid fuels is high and as a result gasoline prices are ‘robust’.
Finally I couldnt help noticing that the new Government in Nigeria appears to have turned to former British Prime Minister Tony Blair for advice about their economy and in particular the NNPC where much remedial action is required. He has apparently suggested a start-up reform marshal plan and an end to the problematic petroleum subsidy regime as part of the new regime’s uphill task with regard to the economy.
Sundry company news
The takeover of Pacific Rubiales is likely to be confirmed today with a bid of C$6.50 to be tabled by Alfa and Harbour Energy. PR has been hit probably more than most in the last few months and this takeover may signal an interesting move in Latin American assets although Alfa was always poised to strike at some time. Either way it will reduce the time taken at the Oil Council judges panel as historically the Pacific Rubiales fans have been most vociferous!
BP and Halliburton have come to a final settlement regarding the claims over the Deepwater Horizon at the Macondo disaster. The deal has concluded with Halliburton being awarded a global master service agreement now that the two are best mates again.
Bahamas Petroleum have confirmed that the 2nd reading of the Petroleum Bill has happened and it now goes to debate and eventually a 3rd reading. Now it’s up to Simon Potter to produce a partner and hopefully drill something by April 2016 but with the backstop of 2017.
Range Resources has announced that it has established a work programme for the St Mary’s block in Trinidad. With technical studies, seismic and four exploration wells planned the process will complete by 2018…
Andes Energia has announced results this morning and has had a pretty good time in the period and subsequently despite a difficult background both politically and from an oil price point of view. I am very positive on Andes and feel that a combination of a really exciting portfolio of shale acreage in the Vaca Muerta in Argentina and the building of the Colombian assets will prove very valuable in the long term. In Colombia they have been allocated new blocks and the Interoil deal added bulk, whilst in Argentina they are very much the leading independent in with the very best partners. Politically, the bases are loaded and patience should be rewarded as I am led to believe that a more oil industry friendly attitude will be taken as soon as is possible.
The Chairman’s office at Ofgem will be where the party is today and the Maccam’s coffee mug will be back in service after the Black Cats got a draw with the Gooners last night and thus secured Premiership football for next season. This finally proves that Avocado is good for you and now the club have to try and retain his services for next year.
In Scotland Rangers took a step in the right direction with a 2-0 win over Hibs in the first leg of the play-offs semi final.
I have waited patiently but no invitations have poured in for the Chelsea Flower Show but I am very lucky to be going to some cricket during the summer as well as Royal Ascot so shouldn’t grumble!
The PGA tournament starts at Wentworth today and with Rory in such amazing form it would be childish to bet against him winning back to back trophies…
Today sees the start of the Lord’s Test, the first of two matches against New Zealand and the inevitable buzz of anticipation is around. It has not been often over my many years of watching cricket that the Kiwi’s have been rated higher than England although back in the day ratings didnt actually exist. England have picked two new caps with Adam Lyth getting the one numbered 666! Losing the toss, England were inserted by New Zealand and a few minutes ago were 32-4 …………Now 99-4…