WTI (Nov) $89.37 +$1.05, Brent (Dec) $92.38 +88c, Diff -$3.01 -17c.

USNG (Nov) $2.96 -10c, UKNG (Nov) 129.5p +8.0p, TTF (Nov) €51.3 +€2.9.

Oil price

Obviously the situation in the Middle East is the dominant force in the oil market at the moment. And at the top of that list is any potential involvement by Iran and yesterday it seemed that might have happened as the US warships in the area apparently destroyed missiles headed towards Israel from Houthi rebels in Yemen. Recent history suggests that having attacked the Saudis and with Iranian backing if this were proved to be the case it adds to the problem.

Technically the market also has had a number of issues to deal with starting with the inventory figures this week. Both the API and EIA stats showed a bigger draw than the whisper, in the case of the more accurate EIA number crude drew by 4.491m barrels against the guess of just -0.3m.

Next up was the news that the US Government had bought 6 million barrels of crude in for the SPR, odd you may think as when I learned about investing one was meant to buy at the bottom and sell at the top, not the other way round…

The US Government has also relaxed the sanctions on Venezuela against some vague promises about next years elections, a good thing it probably only adds about 200,000 b/d of that low quality crude that only makes the grotty end of the refined barrel.

With the November WTI contract expiring today with good open interest and yesterday’s Chinese GDP coming in better than expected at 4.9% there is little bad news for the market to dwell on whilst outages in Norway have firmed up the gas price this week.

US Oilers

It is worth noting that the recent push into the $90’s has led to a burst of corporate activity either actual or rumoured in the US oil patch. In the first half of the year energy stocks underperformed (+5% vs S&P +115) which clearly got the potential acquisitors in the sector sharpening their pencils.

The biggest move was obviously by Exxon who have swooped for Pioneer putting some $60bn on the table for Permian and other quality acreage. Elsewhere this week Chesapeake are rumoured to have approached SouthWestern Energy which would be a $12bn mouthful.

Others are also looking around, nobody would be surprised if Devon weren’t going participate in all this and they have been linked with both Marathon ($17bn) and CrownRock ($10bn) in recent days. All this is because the number crunchers have got to that magic time when share prices and the oil price have moved apart, known as the crocodiles jaws (@David Gray) the underperformance of oil company stocks makes it cheaper to drill for oil on Wall Street than to go do it themselves. Expect more M&A across the board, even in the UK some stocks are looking way too cheap.

Africa Oil Week

My trip to Africa Oil Week was extremely fruitful and a number of countries as well as companies showed just how well they are doing on the continent. Country wise I would pinpoint Angola, Namibia, South Africa and Nigeria as being in the spotlight, the latter due to San Leon Energy being able to announce the huge funding for the pipeline during the conference. Also speaking to Apache I learned more about Egypt and why Pharos and others remain keen.

The other country that was being mentioned a great deal was Morocco, ahead of next week’s Morocco Summit it was good to see a full complement of Chariot executives speaking at the conference and plenty of chatter about Sound and its progress (see below) as well as SDX and its reemergence and of course the exciting potential at Predator who won’t be at the Summit.

Clearly Afentra are doing very well in Angola and I’m just picking up on Corcel as well who are in country. Finally Eco Atlantic appear to be gearing up for a spectacular campaign, not just in Africa either.

Finally whilst British Airways cannot be blamed for the cancellation and 28 hour delay of the return flight from Cape Town to London but it can be delayed for a disgraceful policy of overbooking which led to an unseemly session of fare paying passengers being booted into touch…

Sound Energy

I have received an up to date  Sound Energy presentation given by the Executive Chairman Graham Lyon, and CFO Garry Dempster which I thought might be of interest :

Sound Energy Corporate Presentation – October 2023

Angus Energy

I interviewed Angus Energy CEO Richard Herbert earlier in the week, in case you missed it, it is below.

Core Finance CEO Interview: Richard Herbert, Angus Energy

And finally…

It is a monster of a weekend sporting-wise, whatever your sport there is something for you.

In the footy there are two huge derbies, tomorrow Liverpool host the Toffees and in what used to be a big game the Gooners visit Stamford Bridge. Also the Cherries host Wolves, Burnley are at the Bees, the Noisy Neighbours host the Seagulls, the Eagles visit the Bar Coders, Forest host the Hatters and the Red Devils are at the Blades. Sunday sees the claret and blue derby when the Hammers visit Villa.

The cricket World Cup continues with Australia 360-7 against Pakistan as I write, earlier in the week there were wins for India and the Black Caps. Tomorrow the Netherlands play Sri Lanka and England play South Africa.

And in the RWC we are the semi final stage, tonight the Pumas take on the All Blacks and tomorrow England play South Africa, a big fixture this weekend.

And for horse racing fans tomorrow sees the denouement of the flat season with the Festival of British Racing at Ascot where every race is a final.

In the baseball, the Phillies lead the DBacks 2-1 in the NLCS and the Rangers and Astros are all square at 2-2 in the other side of the draw. Philly is rocking at the moment as the city can sense a return to the World Series from last year and possible first championship since 2008. There is still plenty of work to do to get there. The Texas showdown is living up to the hype with game 5 this evening.

And of course we return to F1 as the caravan heads to the USA for the Grand Prix at the Circuit of the Americas in Austin Texas. It’s a sprint weekend with quali today, sprint tomorrow and the full race on Sunday night.