WTI $46.06 +12c, Brent $48.80 -25c, Diff $2.74 -37c, NG $2.26 -4c
Oil price
It looks like oil will have an up week unless something goes terribly wrong, yesterday was listless with US GDP and new homes data being described as sluggish. The differential is down to below three bucks as WTI outperformed Brent but if they hold around these levels the chartists at least remain optimistic.
Natural gas prices are all over the place, the EIA inventory report showed a 63bn cubic feet injection against forecasts of 69bn but wild gyrations ahead of the winter are not unusual. The 5 year average injection for this week is 73bn and last year was 88bn but stocks are still 12% above this time last year, make out of that what you can…
BG Group
With the Shell bid for BG not completing until early next year it is business as usual for the company who reported 3rd quarter results this morning. E&P production was up 26% at 716/- b/d and guidance is upped to 680-700/- b/d with QCLNG and Brazil boosting the numbers. EBITDA guidance is maintained amid an increase in the oil mix but obvious hit on prices. LNG is said to be ‘robust’ which is about as good as it gets, I am looking forward to seeing the combined Shell/BG LNG division in operation. As with everybody else, costs are down sharply with savings being made across the board and capex is down 30% at $6.5bn. If you assume that Shell will complete the acquisition, BG shares are an undeniably cheap way into the new combo but the big call is when to do it, there will be a magic time in which the cash and divvi sums all add up and so a close watch will be needed on the market, as they say in the best horse racing circles.
Cape
The Cape/UGL JV has won a two year contract with Woodside for their Karratha Gas Plant Life extension programme. I am still a big fan of Cape and the work that Joe Oatley and team are doing there and in a difficult market place are delivering the goods day in, day out.
Sundry
Global Petroleum has updated the market, in Namibia they are in discussions with the authorities to extend their licence period and in Italy they are progressing their four offshore blocks. Sometimes accused of taking their time over promised acquisitions,…
