WTI $36.31 +69c, Brent $37.92 -1c, Diff $1.01 -$1.30, NG $1.89 -10c

Oil price

The first up day in six traded, was for WTI followers something to cheer about but it might all still end in tears. Inventory stats from the API tonight and the API tomorrow will need to be good to keep a very modest rally going. That means that stocks will have to fall at Cushing and overall and even then not deemed to be an end of tax year break. As for Brent it was less positive but more nervous as it headed toward expiry and today will show whether there is any support for the February contract. As for natural gas which I mentioned here yesterday it lost another 10 cents and is now adrift of the emotional $2 level as the mild winter continues.


Petrofac announces its end of year trading update which overall looks pretty much in line with recent guidance. I will have more detail on the company after their meetings next week but the key points are as follows. Order intake in the year to date is $8.8bn with the company talking of a ‘disciplined approach to new business’ which I take to be not buying low margin rubbish to fill the order book. The ECOM backlog is now $18.5bn, a record and proof if such were needed that the company is still active in its core markets. This backlog gives more visibility through 2016 and the pipeline of bidding opportunities is ‘robust’ as ongoing clients remain active in these key areas. IES remains a problem although now effectively history and the company expects ‘a modest trading loss in 2016’ which may not have been in the models. As for Laggan-Tormore the picture is still totally clear, construction is finished but final numbers will not be known until the final results early next year.

Tullow Oil

A very positive result from Etom-2 in Northern Kenya as the company report 102m of net oil pay in two columns, the significance of this is that this well was drilled when 3D seismic data was analysed after the Etom-1 well was drilled. The well found high quality API oil and the best quality reservoir encountered so far in the South Lokichar Basin. Overall a very useful result given that this part of the block is under-explored and there is much work still to be done.

And finally…

Leicester 2, Chelsea 1 tells you that something is not right at both clubs. Either the 28-1 for the Foxes to win the Prem is too generous or that Chels are appropriately close to the drop zone. As ever the answer is somewhere in between and the Noisy Neighbours and the Gooners will be licking their lips ahead of the Christmas break.