WTI $48.62 +54c, Brent $48.61 +26c, Diff +$0.01 -28c, NG $1.98 -8c

Oil prices

The first up day for a while and that was before the API inventory number came out after the close. Trying to pick the bones out of those numbers is more difficult than it first seems, the crude number, showing a draw of 5.1m barrels roughly double expectations, is quite bullish although starting to be affected by the forest fires situation in Canada. There was a draw of 189/- barrels at Cushing which also ticks the box and distillates also drew much more than expected at 2.9m vs guesses of -1m. So the fly in the ointment is the gasoline number, analysts were expecting a draw of 1.3m barrels but the outcome of a build of 3.6m has flummoxed even the brainiest of bears, I suspect a rogue number to be honest especially the week before the Memorial Day holiday and the start of the driving season.

A number of things make it worth commenting on retail prices for petrol or gasoline, depending on where you are. Over this side of the pond there is a general view, fuelled by the tabloid press, that petrol prices go up like a rocket but down like a feather, usually wrong but why let the facts get in the way of a good story eh? So I was looking at the impact of the French refiners strike which may lead to shortages and ultimately good excuses for higher prices. These price increases will for once be totally justified if you look at the stats, since the January low the Brent price is up 74% whilst in the UK petrol prices are up around 6% from the low of 99p a litre. In the US WTI is up 83% since the low and gasoline is only up 15% at $2.30 a gallon. So when the tabloids and the news channels start to complain about the retail price for once they wont have a leg to stand on, those lovely oil companies are doing everyone a favour…

IGas Energy

IGas is the sector’s slow burner at the moment, today’s update shows solid if unspectacular performance whilst keeping costs down and protecting long term revenues. Production is in line with guidance, now 2,500-2,700 boe/d a good deal of which is long hedged to provide cash flow consistency. Opex of $30 a barrel is good and with cash of £22.5m and capex of $10m (confusingly in dollars) is well placed and fully funded for its plans. Those are applications still being submitted in various stages which rather gives the lie to the assertion in the Lex Column this morning that the company has decided ‘not to bother’ with producing shale gas from UK fields. With strong funding, an exciting portfolio and a slow but inexorable and grudging move to more favourable planning results, IGas may be slow burning but at least the lights never went out when things were bad…


Range Resources has appointed a new Chairman, Mr Zhiwei or ‘Kerry’ Gu steps up from being a non-exec to take over. A partner of Dentons, a leading international law firm, will give Range more credence as they continue the process of re-aligning with shareholders and the market.

Exxon holds its AGM today amidst a traditional furore from all quarters. Facing down the environmental protesters is normal but Calpers would like more access and the company have got the Grauniad in a fit of pique at not being allowed into the meeting…

And I notice that Woodside have started seismic operations in the South Porcupine Basin offshore Ireland, this will give smaller participants hope that slowly things are beginning to happen.

Finally, just proving that companies can be both innovative and helpful it is now possible to watch the drilling of Sound’s Tendrara well via a webcam available on their website. I dont think it will be able to spot some give aways such as flaring, that would be asking rather too much!

And finally…

A touch quiet on the sporting front this week but Muzza eventually proceeded against Stepanek in five sets although there was less good news from Konta and Robson.

Just the i’s to dot and the t’s to cross now for the special one as he decides his backroom team and of course what is going to happen to Ryan.