WTI $48.14 -31c, Brent $54.62 -65c, Diff $6.48 -34c, NG $2.78 -4c

Oil price

A short and late blog as I have been busy with meetings, today’s is primarily for record.

Another bad week for the oil price with WTI down 6% and Brent down 4%. The price has fallen again today taking WTI down below $48 at $47.55 and Brent at $53.75. There are a few things to bear in mind, especially if you, like me, think that oil will if not test the February lows, then have a look at them. Technically WTI at least is in another bear market being well over 20% off the June 10 peak and for the time  being things dont look too clever. And remember that Friday’s fall was against a softer dollar…

The three things to bear in mind are, the general oversupply into the market by a number of participants, shortly to be added to by Iran, the high stock levels, particularly in the US and the rig count which has given the indication of turning. On the stock front the numbers are a touch worrying, with a very strong summer season of demand coming to an end, if they dont start coming down soon then be very afraid, as with the driving season ending on Labor Day on 7th September demand for product will evaporate in the hiatus season before the winter. The rig count was bad on two fronts, firstly +19 overall and +21 in oil is by any understanding a sharp rally, made worse by the fact that the rig count was not lowered in any major basin of the States last week.

Afren- Call in the cops.

The situation at Afren has got beyond a joke and the whole affair merits a serious enquiry as there is much more unpleasantness here than meets the eye, the situation is not ameliorating one bit. The general meeting on Friday was called off as it was deemed that £49m was nowhere near enough to plug the vast gap in finances and the begging letters were already being penned. The Sunday Times stuck the knife in but it could have been much worse, when the real truth about what has happened here eventually comes out I suspect that goings on at Afren have been a scandal for a very long time and much has been covered up into the bargain. Stories of delays in platforms, jackets and pipes are doing the rounds and if you thought that scrubbing lucrative hedging contracts for $60m of immediate cash flow was appalling then you havent heard the stories about cancelling projects but paying 90% of the costs…Afren hasn’t passed the smell test for some time, right now anyone who has been involved with some of the decisions made in recent times should soon be feeling the warm breath of the law very close to hand.

Sundry

BP kicks off the interim results season tomorrow reporting 2Q numbers that will include a $10bn hit after their recent settlement. With a number of cases still going through the judiciary the $54bn will surely be passed and those of us who said that the final number would be high 50’s a long time ago will be proved right. The other thing that I might be proved right about is that the last increase in the dividend was certainly unwise, possibly irresponsible and will be a millstone around their neck as they make difficult funding decisions in the months ahead.

BG has announced that the bid from RDS has received unconditional merger clearance from CADE the Brazilian competition authority. Next up is clearance from the competition authorities in Australia, China and the EU.

And finally…

It was a cold wet and windy day in the Solent yesterday and the crews from the Americas Cup yachts were nowhere to be seen as we headed past Portsmouth. On Saturday they and their support boats were active and it was good to see that Sir Ben picked up a few tips from us and won the weekends abridged racing…

The Grand Prix was by all accounts very interesting at most levels. If you had said that 1,2,3 would be Vettel, Kvyat and Ricciardo then it would have been at a very high price, Lewis was at his own admission, awful and so sad to see Nico getting a puncture so far away from the pit lane…

Froomey won the TdF but the French remain extremely suspicious as if winning the race should be by a national or Lance Armstrong, I dont remember them complaining then…

The womens Ashes is under way today after the rain and England have been set 242 to win, a hard task in the conditions.