WTI $58.98 +99c, Brent $65.03 +$1.01, Diff $6.05 -71c, NG $2.92 -3c
Oil price
Plenty to talk about on the oil price this morning as oil and products held key support levels yesterday and kicked on, aided by the overnight API inventory stats and later the EIA numbers. They showed that crude stocks fell by 2.7m barrels, higher than analysts forecasts of 730/- whilst in gasoline, inventories drew by 2.8m barrels. On the evidence of May so far and numbers we can glean from various sources, we might be in a better supply/demand place than had previously been expected. The EIA report indicated that not only was US production 112/- b/d down but that demand was up 1.4m b/d at 20.23m b/d.
Another report worth taking a look at is the EIA one on downstream where they highlight the fact that margins are at ‘several year highs’. Their analysis of crack spreads show that with New York Harbour gasoline prices of $1.79 per gallon and Brent at the equivalent of $1.41 per gallon leaving a 38c/gallon margin, the highest April number since 2007. They also report that margins are high in Europe the Middle East and in Asia where demand for products, in particular liquid fuels is high and as a result gasoline prices are ‘robust’.
Finally I couldn't help noticing that the new Government in Nigeria appears to have turned to former British Prime Minister Tony Blair for advice about their economy and in particular the NNPC where much remedial action is required. He has apparently suggested a start-up reform marshal plan and an end to the problematic petroleum subsidy regime as part of the new regime’s uphill task with regard to the economy.
Sundry company news
The takeover of Pacific Rubiales is likely to be confirmed today with a bid of C$6.50 to be tabled by Alfa and Harbour Energy. PR has been hit probably more than most in the last few months and this takeover may signal an interesting move in Latin American assets although Alfa was always poised to strike at some time. Either way it will reduce the time taken at the Oil Council judges panel as historically the Pacific Rubiales fans have been most vociferous!
BP and Halliburton have come to a final settlement regarding the claims over the Deepwater Horizon at the Macondo disaster. The deal has concluded with Halliburton being awarded a global master service…
