WTI $46.06 +12c, Brent $48.80 -25c, Diff $2.74 -37c, NG $2.26 -4c
It looks like oil will have an up week unless something goes terribly wrong, yesterday was listless with US GDP and new homes data being described as sluggish. The differential is down to below three bucks as WTI outperformed Brent but if they hold around these levels the chartists at least remain optimistic.
Natural gas prices are all over the place, the EIA inventory report showed a 63bn cubic feet injection against forecasts of 69bn but wild gyrations ahead of the winter are not unusual. The 5 year average injection for this week is 73bn and last year was 88bn but stocks are still 12% above this time last year, make out of that what you can…
With the Shell bid for BG not completing until early next year it is business as usual for the company who reported 3rd quarter results this morning. E&P production was up 26% at 716/- b/d and guidance is upped to 680-700/- b/d with QCLNG and Brazil boosting the numbers. EBITDA guidance is maintained amid an increase in the oil mix but obvious hit on prices. LNG is said to be ‘robust’ which is about as good as it gets, I am looking forward to seeing the combined Shell/BG LNG division in operation. As with everybody else, costs are down sharply with savings being made across the board and capex is down 30% at $6.5bn. If you assume that Shell will complete the acquisition, BG shares are an undeniably cheap way into the new combo but the big call is when to do it, there will be a magic time in which the cash and divvi sums all add up and so a close watch will be needed on the market, as they say in the best horse racing circles.
The Cape/UGL JV has won a two year contract with Woodside for their Karratha Gas Plant Life extension programme. I am still a big fan of Cape and the work that Joe Oatley and team are doing there and in a difficult market place are delivering the goods day in, day out.
Global Petroleum has updated the market, in Namibia they are in discussions with the authorities to extend their licence period and in Italy they are progressing their four offshore blocks. Sometimes accused of taking their time over promised acquisitions, CEO Peter Hill says that they remain in discussions with counter parties for ‘appropriate’ assets and that sellers are becoming increasingly realistic on values. However the company saying that they remain ‘extremely selective’ means one shouldn’t hold ones breath…
This afternoon Exxon, Chevron and Phillips 66 report third quarter numbers mainly completing a week which has probably gone as well as it might have under the circumstances.
The trade press is reporting that Primeline has discovered non-commercial gas in its exploration well in China, I hope to have an update with the company soon and will report back then.
Finally here are links to a number of interviews I did recently for Interactive Investor, all are on the blog website.
After all the hype and disastrous performances by the Northern Hemisphere countries the RWC concludes tomorrow with the All Blacks unsurprisingly taking on the Wallabies. All those jokes about the only home nation involvement being the referee were true after all…
It’s over to Mexico for the Grand Prix but a little bit after the Lord Mayor’s show as there is little left to play for.
England have a chance to even the test series against Pakistan but I can imagine that the groundsman has found a suitably heavy roller to park on the pitch all week. With poor performances from the middle order quite how James Taylor hasn’t secured a berth is anybody’s guess although selectors rarely see eye to eye with the fans who pay their wages…
In the Premiership the big match will be at Stamford Bridge where the HubCap Stealers are the visitors. The Chosen One welcomes the Normal One in what will be a fascinating duel. The only derby match I can find is on the south coast where the Cherries visit the Saints although the Hornets entertain the Hammers which isnt a long trip. Elsewhere the Red Devils go to the Eagles, the Swans host the Gooners, the Canaries go to Middle Eastlands and in a sort of derby the Baggies entertain the Foxes. The Toffees take on the Maccams, invigorated by beating the Magpies last week, they host Stoke whilst Villa go to Spurs.