WTI $53.98 +$1.84, Brent $59.10 +98c, Diff $5.12-86c, NG $2.68 +3c
Oil price
Resilient is the word that comes to mind with regard to crude prices as most influencing numbers are bearish. Take these stats for example, yesterday al-Naimi said that March Saudi production was 10.3m b/d, even higher than I mentioned yesterday, figures show that in the last week of March US imports from Canada were 3.3m b/d, the second largest number ever and the API stats showed a crude build of 12.2m barrels way above analysts guesses of 3.4m barrels. The only offsetting bonus was the tiny fall in US domestic production which to be frank is neither here nor there. Tonight's EIA inventory numbers will probably not be as high as the API stats as they are catching up on the Cushing number but keep a close eye.
So, the oil price rallied during the day and closed near the highs, this morning, taking into account the stock data both markers have lost about a dollar a barrel.
Shell / BG - If you see Sid, tell him…
I will make a few brief comments about today's mega bid and add more after the webcast later. Readers will know that I have always said that BG wasnt too big to be bid for, primarily as although $70bn rules out all but the largest suitors, it breaks into bite sized mouthfuls for asset sale purposes. Actually Shell is going to assimilate most of the key parts of BG but the group treasury will have much to be getting on with as BvB has identified at least $30bn of assets up for auction. Add to that $2.5bn p/a of synergies and the ability to high-grade the portfolio and I believe that Shell have made a very smart move here. The bid plays to their strategy of concentrating on integrated gas and deep-water exploration and development and it is not in my view a bet on the oil price at least not primarily.
With disposals Shell's portfolio will undoubtedly look better adding Australia and the Atlantic basins into the process and as has been mentioned replicates the Repsol deal on integrated gas. Finally for what it's worth I don't think that Shell placed a very high valuation on Brazil, it just suits. The jewel in the crown will be the LNG business which combines two of the best operated companies in the…
