WTI $45.89 -$1.37, Brent $48.61 -$1.85, Diff $2.72 -48c, NG $2.44 +1c 

Oil price

The oil price fell yesterday, maybe the Chinese data spooked it a bit and there are some bears around who feel that tomorrows ‘technical’ meeting at Opec is just a bit of a charade. What is indisputable is that gasoline is falling again, no great surprise after the driving season and with such a large stock position overhanging the market. Retail gasoline is down too, the average gallon of gas in the USA now costs $2.277 which is down 6 cents on the week and 84.3 cents on the year.

Genel Energy

A third quarter trading update from Genel where all the good news about being paid by the KRG is more than offset by the company lowering its production and revenue guidance. They are now expecting 85-90/- b/d down from 90-100/- b/d and the revenue estimate is just tightened from $350-400m to $350-375m. The shares have fallen 5% on the news which is probably about right after having had quite a good run lately.

Longer term Genel do still seem to be in a relatively strong position and I agree with the management when they say that the third quarter was a ‘turning point’ for the company. Payment from the KRG was received in September and the next one is ‘imminent’ and with exports from the KRG hitting new highs and the pipeline uptime improving confidence that revenue will pick up is obvious. Prices being achieved are not too bad although further discussions are due to be held with the Government on that front. The fall in guidance and revenue numbers appears to be related to when the KRG was not forthcoming with the moolah, we may discover at some stage if the taps are turned on again. I remain as positive as one can about an oil stock in this market but at least with the payments coming through the major potential downside has been taken away.

Sundry

Wood Group has announced a $31m CBM contract for Carbon Creek Energy in the Powder River Basin in Wyoming.

And its the night of the long knives at Nighthawk as CFO and Co Secretary Richard Swindells leaves the firm, the CFO role has been downgraded to a non-board position following this. Also being told to ‘get out of Denver baby’ is the founder of the company, Mike…

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