• WTI $44.63 -$1.29, Brent $48.14 -75c, Diff $3.51 +55c, NG $2.69 +1c


Oil price

So much data to analyse and for the first time for a while the agencies are beginning to differ in their reading of the oil supply and demand situation. The EIA is markedly less optimistic than the IEA with regard to the balance, as the latter suggests that non-Opec supply will fall by a short 1/2m b/d and demand numbers are up by 1.7m b/d this year and 1.4m next. I know who I would normally believe out of those two and as longer term readers will know its not the IEA. The third agency reports today and it will be a surprise if Opec are far away from the EIA but lets wait and see.

The rig count continues to help, minus 16 at 848 overall on Friday and oil down 10 at 653 was 56% down y/y and there are enough rumblings about US production falling to at least bear that in mind. Worth another peek at the interview Rex Tillerson did with PIW recently and also that the autumn refinancing’s may not be so cosy as those in the spring…

Its all about the Fed this week and although the chance of a raise have fallen from 50% to 30% some are still saying get the rise out of the way the sooner the better. However, those of us without the enormous brain of an economist must be listening to the IMF and the World Bank saying that the world is teetering on the edge of another major setback and thinking that raising rates isnt the normal bedfellow of catastrophe, mind you if Johnny Sutton and Marcus Ashworth agree something must be amiss…

If you watched BBC’s Countryfile last night you would have seen something very rare, no not a rural Corbyn but a relatively and refreshingly unbiased piece about fraccing. Half way through I was expecting a homage to the antis but we then got John Blaymires of IGas giving the other side which was quite refreshing and well done by him.

Shell/BG

Interviewed in the FT this morning albeit too briefly, BvB has stated not for the first time that the risks of the BG deal not completing are ‘exaggerated’ and that the two share prices had been ‘knocked about’ by market turbulence. On the dividend he maintained his commitment but also said that the yield at 7.8% was ‘outrageous’, IMHO if the Shell divvi is seriously under threat you should be flogging your BP first…

President Energy

President this morning gave an update on the seismic work being done on the Hernandarias block in Paraguay. Work is ongoing but the seismic is apparently of excellent quality and it is already clear that several drillable Paleozoic prospects have been identified. These are in line with expectations and exist at 2,500-3,000m, around 1,000m shallower than Jacaranda and Lapacho. The shares are down, probably only in line with the market but the company have made this look like a holding statement having promised more a while ago. We will now not get any more updates until after discussions with partners and the Ministry, likely to be in October, so not long.

Sundry

Oil Search has turned down the offer from Woodside calling it the usual array of undervalued and on the cheap. Now we wait for the next chapter and whilst Oil Search holders will be waiting for more money this is no market to get greedy in….

Trinity Exploration and Production have managed to get a further extension to the moratorium until 25th September, looks touch and go this one…

Magma Global has announced a joint development with Subsea 7 and BP in a project to qualify Magma’s carbon fibre m-pipe® as the next generation of subsea pipelines. Magma is a private, Portsmouth based company and this will do them a power of good. Ironically I am visiting the company this week to get an idea of what it is all about.

FOGL was up nearly 20% at one stage this morning as punters didn’t quite get to grips with the words ‘at Humpback none of the reservoir objectives have been penetrated yet’. FOGL were as I understand it, quite reluctant to go with an announcement on Friday but as the well must be the best part of a month behind time I suppose some people in the market deserve to know what’s not going on.

And the worst kept secret in the oil services industry has been revealed as Neil Bruce is taking over the top job at SNC-Lavalin. After unceremoniously leaving Amec, Neil deservedly popped up at SNC and master-minded the Kentz deal which Amec had prevaricated over to its cost.

And finally…

At Old Trafford on Sunday the Aussies finally got their hands on some silverware, as World Cup winners they might have thought the ODI series would be a piece of hit and miss but after losing the Ashes and the T20 they were close to going home empty handed. Of much more note in cricket today is the death of Brian Close, former captain of Yorkshire and England. Those of us who watched back then could hardly dare look as he stood up the the fiery West Indies pace attack in 1976, interestingly 27 years after his first test when at 18 he was the youngest ever capped for his country.

The football at the weekend was a bit mixed, Chelski lost 1-3 to Everton apparently because the computer went down, elsewhere Man Who managed to see off the HubCap Stealers 3-1 with a display of Martial arts and the Foxes came from 0-2 to beat Villa 3-2, anyone else think the Villa fans were doing the Olé’s a bit early? Otherwise wins for the Noisy Neighbours, although the Eagles nearly got a point (or more…Moose) and Spurs for the first time this season at the expense of the Maccams who are about to offer a new contract to Richard Avocado….Wins too for the Gooners, the Canaries and the Hornets. The happy Hammers host the Magpies tonight, what Irons team will come out I wonder?

And if you watched the St Leger on Saturday did you think that Ralph Beckett had a point after the stewards demoted Simple Verse to second place thereby elevating the favourite Bondi Beach into first spot? Its not pretty when someone in the Stewards room decides the outcome of a classic…



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