WTI $22.43 -$2.79, Brent $26.98 -$1.49, Diff -$4.55 +$1.30, NG $1.60 -5c
After Thursday’s bounce it all went pear shaped again on Friday as crude prices fell again, indeed WTI for April expired at the close, May was $22.63 so only 20 cents higher. The rig count indicated the shape of things to come with a fall of 20 units overall to 772 and down 19 in oil to 664.
Today markets are falling again for two reasons primarily, firstly that democrats stalled the coronavirus stimulus Bill, ironically taking advantage of Republicans absent due to….you’ve guessed it, the virus concerns. The second reason is down to a fall in demand for oil and if you look at some of the investment bank guesses for Q2 GDP falls you can understand why, JP Morgan on -14%, G Sachs on -24% and Morgan Stanley on -30%, pick a number, any number.
Royal Dutch Shell
I don’t normally comment about Shell but these aren’t normal times, It is worth noting that Shell has commented on cost cutting this morning, always worth taking note of. Capex will fall by c. $5bn, Opex by a potential short $4bn and the share buy back is temporarily suspended. With $20bn of cash plus the usual fall-back lines of credit, Shell is hardly in Carey Street, the shares have more than halved, yields over 15% and this might be the time for those of a long term disposition to dip their toes in the water…
Results from a number of companies have been delayed, no fault of their own but RockRose, IGas, SDX and Lamprell have been asked to hold back for a short while before putting out results. Petro Matad has put out an operational update this morning, I will comment on this tomorrow as I have managed to get a call with Mike Buck early tomorrow morning.