WTI $44.96 +$1.09, Brent $50.41 +$1.80, Diff $5.45 +71c, NG $2.84 +4c

Oil price

A decent rally in the crude price yesterday and it was actually better than it looked, Brent had traded as low as $48.24 during the day, before rallying to close near the highs, WTI not so good as BP’s Whiting refinery distillation plant went down apparently temporarily. All sorts of factors were at work, the Chinese trade data had disappointed on the export front but imports reached record highs in July, partly including oil but all round the world refineries have been flat to the boards so watch out for build up in those markets. The dollar weakened as the Fed’s Fischer was less sure about a September rate rise and of course on the currency front China has devalued the Yuan by 1.9% this morning causing markets to worry about the economy further.

This morning has seen the restart of the first Japanese nuclear power station since the Fukuyama disaster, the Sendai plant operated by Kyushu Electric Power has passed all tests and in due course both its reactors will be up and running. When the disaster happened the impact on the economy was significant, since then Japan has had to import LNG and crude oil for all its needs and will continue to do so. There are significant protests about the nuclear industry over there and it will be a long time before the country lessens its need for conventional hydrocarbons.

Today sees the Moscow summit in which the Saudi Foreign Minister visits to discuss global crude prices, specifically to discuss ‘closer coordination on global energy markets’. I dont see this as anything of significance for the oil market per se as Russia’s economy continues to rely on its oil earnings, in dollars, and any cooperation can be modest at best. Finally the retail gasoline and diesel prices fell again last week in the US, gas was $2.629 a gallon, down 6 cents on the week making 88 cents on the year and diesel remains cheaper at  $2.617 down 5c and 123c respectively reflecting the continued availability of product.

Wood Group

Wood has announced a $28m, 3 year offshore engineering blanket order from PEMEX for field development in the Mexican sector of the GoM. The order encompasses deepwater as well as complex shallow water engineering and the company feel that they are very well placed in the region. Wood has interims a week today and with the 2nd quarter having been the worst for oilfield service companies the results meeting will be of significant interest but given the recent oil price movement hardly likely to be overly bullish.


Velocys has announced that Roy Lipski its CEO is leaving the company with immediate effect by mutual consent. Although things had looked somewhat concerning when the company suspended him recently, they point out that he was not the subject of a disciplinary hearing and that there was no finding that any misconduct took place. Interim CEO Susan Robertson remains in place while a replacement is found and the company reiterate that ‘Now that the Company is progressing into its commercial phase with its first industrial project being built, project management and engineering skills will be increasingly important keys to its future success’. Following this recent activity it will be time to rebuild confidence in clients, staff and investors and provided that the business model is still intact I shall remain of the view that the company has an exciting future, however it is understandable that the jury will remain out for a while, particularly in the investment community.

Independent Oil & Gas

Not a good couple of days for IOG as the major player they had been talking to with regard to financing appears to have walked at the last minute. I have had a long chat with CEO Mark Routh this morning and whilst inevitably disappointed the team are not going to lie down and are actively seeking replacement funding. There is much to be done to keep the Alpha deal alive, to secure the continuation of the licences and to repay the Darwin loan all due in the next couple of months. There can be few managements I would rate as highly as that at IOG and I hope that their tenacity will pay off and something will come of the major discussions that are continuing regarding a funding event.

And finally… 

Today sees the start of the only test match in the womens Ashes series and having lost the two one dayers the England team need to win at Canterbury to have a realistic chance of success in the series.

Whilst I was at Trent Bridge I was able, thanks to Debbie and Jon Gregory to visit the broadcasting box of the Test Match Special team. For a cricket fan few opportunities are as rare as this and I had a truly wonderful time in the company of many cricket legends, too many to mention although I may namedrop Sir Geoffrey, Tuffers, Michael Vaughan, Glenn McGrath, Aggers, Jim Maxwell, Blowers,Vic Marks, Shane Warne amongst others in future blogs…

England coach Stuart Lancaster has named his side for the warm up game on Saturday against France, the most interesting is that of Sam Burgess at centre as there are dissenting views about his ability in the 15 man game. With a rematch the following Saturday by then all the options should have been assessed in detail and the final squad will have virtually picked itself.

And the Noisy Neighbours got off to a good start last night as they won easily 3-0 against The Baggies but they did look sharp. Meanwhile word is that the Hammers are about to sign Joey Barton, could this be the worst piece of transfer business or the most inspired?