WTI $58.58 +$1.52, Brent $65.84 +$1.20, Diff $7.26 -32c, NG $2.61 +7c

Oil price

The oil price primarily tracked the weak dollar yesterday, rising as US GDP figures disappointed and rate hikes were postponed. The EIA inventory stats also provided some succour for WTI, with the stock build being 1.9m barrels lower than the consensus of 2.3m. Whisper it very quietly but stocks at Cushing actually fell last week which is the first time that has happened for five months.

There is also a slight discrepancy appearing in the 1H/2H worldwide supply and demand picture, whilst 2H 2015 looks like seeing the potential for stocks being taken off the market which would be bullish for the oil price the results from the majors show a potential fly in the ointment. BP and Shell have both reported that their trading departments have had brilliant quarters, being able to buy cheap crude and using their storage facilities to sell further out taking advantage of the contango. This does however mean that this crude will reappear in the market in the second quarter as they unwind the contango, but let's worry about that later shall we?

Also, with results today from Exxon, Conoco, Marathon and Phillips 66 and tomorrow from Chevron we may see more of the same.

Finally the changes being made in Saudi Arabia are most interesting and we now have a clear line of succession which should be better all round. The new Foreign Minister is a Washington insider which might encourage the Shermans who have been pretty anti-Saudi on Barry's watch. It appears that there will be no change in oil policy as a result of the changes even though Ali al-Naimi loses his posts at the top of Aramco.

Shell 

Today's first quarter figures from Shell echo those of BP on Tuesday, better than the whisper and better downstream where refining margins and lower costs have made the figure look better than expected. As mentioned above, oil trading also contributed as the company took advantage of the contango. Upstream was, as one might expect, grotty but even this was slightly better than expected where the negative effect of lower oil prices was offset by lower costs and new high-margin liquids production volumes from deep-water projects improving the operating performance. As one would expect the emphasis on cost reduction is significant with both opex falling and capex for this year falls by $2bn…

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