WTI $39.91 +47c, Brent $41.54 +34c, Diff $1.63 -13c, NG $1.83 -8c
With WTI expiring last night and the holiday weekend fast approaching there is a feeling of apathy in the market, most unprofessional I hear you say. Even scanning the company news this morning revealed little to say, expect thin rations for the next few days.
The Genscape inventory numbers gave reason to be slightly optimistic last night, showing as they did, a 571/- draw in stocks at Cushing, more of the same from the API or EIA would be helpful but the teenage scribblers are expecting a build of around 3m barrels, we shall see. My watch of the retail gasoline price tells me that the recent rally continues, US motorists are now paying over $2 a gallon on average, around 30 cents off the recent lows.
February was a down month due to pipeline disruptions but today’s announcement that payments have been made from the government for Tawke and Taq Taq at least show some more give by way of extra payments for past deliveries. Put simply the mechanism is now in place to pay back outstanding amounts and whilst it is modest at 5% it shows willing and is expected to be increased as and when the budget allows. Whether GKP can run on fumes for long enough is another matter entirely.
The company revised its 1Q guidance yesterday, bringing expectations for the quarter down from $6.94bn to $6.5bn, at least this company does give some guidance I hear you say. Interestingly enough the shares actually rose on the news and remain up nearly 25% ytd. The company advise that this is the 3rd phase of E&P spending reductions and expect a ‘significant impact on EPS in the current and coming quarters’. Having said that they are still paying dividends, bought back 5.4m shares at $73.86 until now and have just approved a $10bn buy-back programme for 2016. Clearly cash is still being generated but if Schlums are finding it hard the rest must be between rocks and hard places…
Whenever Ian Taylor, President and CEO of Vitol talks I strongly advise listening, he didnt, as they say, get where he is by talking guff. With today’s results comes a long and most interesting analysis of the current situation in energy markets from the perspective of probably the best trader around, and is worth reading. He says, not surprisingly, that the market is still challenging and he reports that revenues ‘fell markedly despite an increase in oil and product trading activity’.
You know when it’s a boring morning for sport when you end up reading Jeremy Guscott’s team of the 6 Nations and then realise what a prat he is by only having three English players in there. For what its worth I am 100% behind Jonny Sutton when he talks about Sexton, who took a few seconds to look up at the ref on Saturday before writhing around in alleged agony trying to get a yellow card awarded. Not in my team Jezza…
Even more boring is the Indian Wells bloke who has resigned after prayergate, he fell into the trap and broke rule numero uno, think it, dont say it…
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