WTI $37.50 +$1.36, Brent $37.36 +$1.25, Diff +$14c, NG $1.98 +10c
The oil price staged a Santa rally yesterday, in thin trading and with positive news traders picked oil prices off their lows before the Christmas holiday. The teenage scribblers yet again showed why their Wall Street bosses should not give them a festive bonus as yet again they made a hash of forecasting the inventory situation. Looking for a build of 1.4m barrels the EIA came in with a draw of 5.9m making the analysis if you can call it that atrocious, wrong sign and over 7m barrels out… The rig count was also a small positive, overall rigs were down 9 at 700 with oil down 3 at 538.
Although the retail price of gasoline hasn’t quite gone below two bucks, on Monday it was $2.026, the US AA say that 100m Americans will take to the roads in the next few days, good thing that there are plenty of gasoline stocks eh?
I like the team at Petroceltic a lot but putting out a trading statement at 1729 on Christmas Eve eve stinks and they and their advisors should know that. Whatever is the content of an announcement, timed deliberately to avoid being seen, is neither here nor there. As it is it is unsurprisingly not good news. Whilst preserving the primary asset is key for the company the rest is firefighting with debt of $218m and only cash in ‘illiquid currencies’. The dreaded ‘strategic review’ is being put in place and we all know what that means and combined with the phrase ‘waivers on breached debt covenants’ bodes badly for the immediate future.
I have some sympathy for the board as they did try to avoid all this by trying a bond issue which Worldview appeared to shoot down although the roadshow for the issue was hardly going well at the time. I have always said that although the asset is of good quality it is under-financed and unless something gets sorted out pdq it wont be Petroceltic who are running it long term. Worldview should be careful of what they wished for, the words ‘reap’ and ‘sow’ come to mind….
Caza Oil & Gas
The company announce that the Talara deal has completed with the huge dilution I talked about last week. This is a crying shame but I suppose that the only alternative would have been bankruptcy which is of little consolation.
I have completed some videos for Interactive Investors which can be viewed on these links;
With limited time it is difficult to assess all the sport over the Christmas period. However it appears that for Mr Van Gaal it is a matter of job preservation although away at Stoke and then Chelski is hardly ideal.
The cricket starts with the Boxing Day Test against South Africa although James Anderson is out injured, maybe not a bad thing on a rock hard pitch, Finny may get the call…
And the best of all will be the racing at Sandown with the feature being the King George VI on Boxing Day but two days of cracking racing not to be missed.
Finally I would like to wish all of you a very Happy Christmas and a peaceful, prosperous New Year. I am behind on replying to a number of people with specific questions and I will endeavour to get to them in the next few days.