Oil price, Afren, And finally…

WTI $42.43 -$1.07, Brent $49.22 -44c, Diff $6.99 +63c, NG $2.79 -14c

Oil price

Another bad day particularly for WTI, as domestic pressures in the US are at present creating an unpleasant backdrop and the chart looks very wobbly indeed. The dollar strengthened on the back of retail sales and employment data but it was towards China that most heads were turned. The Yuan has lost over 4% this week although it has steadied a bit this morning as the PBOC has been heavily intervening selling dollars to buy their own currency. Memories are indeed short as it doesn’t seem that long ago that we were being warned about how much of the greenback that they owned, now they are forced sellers… On this note it is interesting to see whether they would be buying crude oil, something I have talked about a number of times recently when the commodity has a bad spell. Whilst it is fair to suggest that the weakness of the Yuan has made crude more expensive it has still fallen massively more than the currency and I wouldnt be surprised to see some buying had occurred when we see the August figures.

WTI was also hit by the Genscape numbers that showed stocks at Cushing rose by 1.3m barrels in the week to the 11th of August, at this rate we will have an agency reporting stock levels every day… The refinery outages I have talked about aren’t going to make life easier, Whiting which is the biggest refinery in the Mid-West may be substantially out for over a month plus two or three others and also dont forget that the driving season is coming to an end meaning a significant fall in refinery runs in September and October. WTI is at a critical level on the chart, yesterday’s low point was $41.91 and any self-respecting chartist will tell you that if we dont hold here the next price might start with a 3…

Afren-There are more questions than answers…

The situation at Afren appears to get worse and I cant help but feel that there is something very suspicious going on here. I read with interest that leading oil trader Gunvor has expressed an interest in some of Afren’s African assets which must be good news for the investors who may lose everything. However I also note that they have been given only until August 17th to come up with a bid on the assets they are interested in. How can it be possible to value and do even the vaguest of due diligence in a week, and also if the administrators are doing their job, surely any possible interest must be explored to the maximum benefit of all who have lost money? And they are saying its not a fire sale which doesnt rub with the above, unless they have other buyers in the wings… The administrators appointed by the company are Alix Partners but maybe questions should be asked of the Ad Hoc Bondholders Committee and also why Blackstone are involved, who they report to and why? Oh well, i’m sure there is a totally innocent explanation…

And finally…

The US PGA got underway yesterday and those out early got by far the better conditions, ironically they will again today as the better weather and less wind will come in this afternoon. Dustin Johnson is an impressive 6 under after the first round, perhaps setting himself up for a huge lead with which to choke on Sunday…

In the womens Ashes series they actually got back on at Canterbury after torrential rain and the Aussies were 90-4 at the close, today is the last day and anything could happen.

Staying with the women England beat South Africa in the netball and go through to the semi-final tomorrow, probably against the Kiwis.

The weekends football kicks off with Villa entertaining the Red Devils for whom De Gea doesnt start, looking a bit ominous, may have to nick someone else’s keeper soon…The big match of the weekend is obviously the Noisy Neighbours hosting Chelski on Sunday whilst the pointless Gooners have a tricky trip across  town to play the Eagles. At the bottom of the table the Maccams host the Canaries and the Hornets entertain the Baggies…