Oil price, San Leon, Sundry-GKP-Wentworth-Tethys-Aminex-Trinity- And finally…

WTI $40.45 -87c, Brent $45.46 -$1.16, Diff $5.01 -47c, NG $2.68 -8c

Oil price

Oil closed sharply down again on Friday, the prices above showed a drop of $2.66 or 6.2% for WTI and $3.73 or 7.6% for Brent. Friday’s PMI data from China disappointed the market as did the US numbers, thoughts of a September rate rise in the US are receding although not certain, Friday’s Jackson Hole meeting should provide more and hopefully from Stanley Fischer who is the mechanic rather than the oily rag.

This morning things have got worse with markets falling dramatically, led by China for whom the bell apparently tolls, equities and commodities have fallen together and with the tide down it is possible to see who has shorts on, so to speak. In oil, things have not changed, the fundamentals are still weak and WTI is $38.94 and Brent $43.62 as I write and with the rig count showing a rise of two oil units last week and WTI net length down another 17% over the same period there is little sign of support. Labor Day is only two weeks hence and after that refineries will take less crude for a while,  chances of any real draw in crude stocks are diminishing and Opec is in disarray.

It is this point that one should consider as a possible, only possible area to grasp at a straw or two, with Iran saying at the weekend that an emergency Opec meeting might be ‘effective in stabilising the price’. So whilst the world wrestles with deflation and a serious lack of growth, demand falling even at current prices might lead to a face-saving act of goodwill from the Saudis should they wish to do so. It wouldnt help the strategy of regaining market share of course and there is no sign of production restraints from the US or Russia but if it looks serious enough to warrant such a meeting it may just happen. Those long positions at a five year low indicate that the market is a one way bet at the moment, despite the fundamentals being awful it may just be worth investigating what would happen if the Saudis called an emergency meeting and a lot of shorts had to be covered in a hurry….

San Leon Energy

On a day when there is red ink all over the market and in the oil sector especially, the sight of San Leon up by 15% is a lighthouse in the fog of despond for investors. The company has announced this morning that they have received an approach from a ‘possible offeror that may or may not lead to an offer being made’. Whether or not this leads to anything and who might be the potential bidder we will have to wait and see but there is little doubt that on the simplest cash flow analysis, buying this company on the stock market may be cheaper than doing the hard graft yourself, particularly as the market for gas in Europe hasn’t heard of the world markets catastrophes.

Sundry

Gulf Keystone has appointed Tory MP Nadhim Zahawi as their ‘Chief Strategy Officer’ whatever that means but either way it seems like common sense and Mr Zahawi appears to have connections in all the right places. Results on thursday for GKP and I am scheduled to meet Mr Ferrier in two weeks time…

I dont cover Wentworth Resources, mainly as I have never managed to get a meeting with management but the news out last week that they had put first gas into the transnational pipeline in Tanzania seems to be positive. Gas is apparently coming from two wells with a further three to come onstream shortly, if anything changes on meeting the management I will update in due course….

If my counting is right then today is Due diligence D-Day for Tethys Petroleum, I seem to remember that Nostrum now have two days to decide whether or not to put the bid formally on the table…

Aminex has announced that it has tidied up its Egyptian interests thus avoiding having to pay for operational costs of its SM-2 well. By selling its APEL holding to Petrosino for a nominal consideration it will receive a 1% gross overriding royalty after costs have been borne. In Tanzania the company are slowly making progress, time for a chat with Jay I think.

And Trinity Exploration & Production shares  are also up today as they announce that their debt has been rolled over until September 11th and that the final sales process is still under way. I have spoken to a number of optimists who believe that Trinity will come through this but at the current price deck I find it quite difficult to make it add up to much…

And finally…

Wasn’t it nice to see Usain Bolt, after a summer of injuries and a dodgy semi-final, lower the colours of double doper Justin Gatlin at the World Championships yesterday? You know that Lord Coe has got a job on his hands when the world tunes in to an event in the hope that an ‘athlete’ if one can call him that, gets beaten in an event that he should not be competing in… Much more exciting was seeing Jess Ennis win her gold and there was proper sympathy for Katarina Johnson-Thompson who’s time will surely come. With Mo Farah getting his gold and more to come lets hope that the spirit of 2012 can be recreated in Beijing.

The most up and down Ashes series for many a year concluded yesterday with The Aussies winning the last test and yet handing over the Urn, as Ben Gregory will also do shortly. Having been at Trent Bridge a different side turned up at The Oval, totally unable to get back in the groove. There are a number of things to sort out, firstly I would make it a mandatory dropping offence  from the team for any bowler who takes a wicket with a no-ball but then it would help if the umpires called a few.. The opening position is available again after a batsman averaging 16 after four matches decided to play an obscene shot to a rank long hop and holed out, Alex Hales scoring 180 odd hasn’t done his chances any harm at all.

With The Gooners playing the HubCap Stealers tonight the early season tables can change dramatically but the Noisy Neighbours are clearly miles ahead of anybody else so far. With Chelski labouring to a win at The Baggies and Man Who looking very poor against Whocastle on Saturday I suspect more transfer activity to come, particularly as Pedro scored on debut.  Elsewhere the Eagles beat Villa, and there were draws between the Foxes and Spurs, the Canaries and the Potters whilst the Maccams actually got a point against Swansea not to be sneezed at. The Cherries got their first win with a closely fought win in a 7 goal thriller at the Hammers.

And at Spa, Lewis managed to hold on securely to win with Nico just behind, the championship lead building nicely.

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