WTI $46.80 +$2.04, Brent $48.47 +$2.22, Diff -$1.67 +18c, NG $2.73 +3c
The oil price had its best day since April as the report from Opec made pleasing reading especially with regard to draw on the cartel next year. By 2H 2017 they expect the call to be 32.97 m b/d based on GDP growth of 3.1%, 2H 17 on 2H 16 is particularly impressive. The EIA have been less positive but with so many numbers to enter into the process making it pretty much guess work you can pay your money and take your choice. News from the Court of Arbitration regarding the South China Sea came out but this will run and run.
After the close the API inventory stats did not make pleasant reading showing a build of 2.2m barrels against expectations of a 3m barrel draw. Oil is down around 60-77 cents this morning and until the EIA stock data is released tonight we won’t know who is right.
Cairn has finally lost patience with the normal channels and is seeking $1bn in compensation from the Indian Government over its claim that CNE should pay $1.6bn in tax. CNE is barred from selling its remaining stake in Cairn India and part of the claim is for financial losses as a result of this. By going to arbitrators the company are trying to speed up the process, if they do not order the repayment CNE can seek compensation of $5.6bn. A tale of woe indeed but I go back to my comments when BP put money down in India, its a hard place to make money and its going to take CNE a long time to get the rest.
Trinity Exploration and Production
It has been quite a while since its problems emerged and this morning, announcing that its shares had been suspended ‘pending clarification of its financial position’ sounds pretty terminal. The Citibank debt is $13m and the parties have been unable to agree a suitable solution and therefore they are not in moratorium any more. With the money due and Citi ‘restricting access’ to the company’s bank accounts it all looks rather like the end game. It is unusual for a bank to totally pull the rug out as there is usually a solution one way or other, particularly if the assets can be sold off to nearby operators but one must assume that all avenues have been explored in recent months. It is still a shame as I always thought that Bruce and the team would find a way to fix it, however difficult.
BP- MAY DAY,MAY DAY, MAY DAY
Not a good day for the overpaid board members of BP as Theresa May arrives in No 10 with a strong view that some executives are being paid too much. At $19m or so Bo Diddeley is towards the top of that list and the company’s lamentable Rem Com will surely know that its time has come…
I have been keeping an eye on this interesting Nigerian play and whilst nothing much is happening at the moment there are clear signs that things may. They announced yesterday that they had received a three year extension by the FMPR for OML 95 the Ororo field licence at a cost of $500/-. So a modest funding of £500/- at 0.25p has been done and will be paid for by SRSP and paid back out of production. Longer term this might be interesting, wait and see.
I noted yesterday that the Champions League was starting so its worth saying that some people, Brendan Rodgers included, probably wished that it hadnt. Lincoln Red Imps of Gibraltar 1, Celtic were atrocious 0 was the score and the ‘Shock of Gibraltar’ will follow them around for many a year. The fact that a police officer scored the goal and the local taxi driver played after completing his fares for the night make it even funnier.
The FA told Sky Sports that Big Sam Allardyce interviewed yesterday so the short list is indeed being constructed.