WTI $59.92 -5c, Brent $63.87 +17c, Diff $3.95 +$1.29, NG $2.86 -4c
Oil price
The FOMC meeting was as important as any marker for the oil price yesterday and the Fed seemed to lower growth forecasts and push out the rate rise markets are expecting. Accordingly the greenback fell and oil prices were in limbo. Of course the inventory stats were important too and the EIA numbers were a right royal mixed bag. Crude stocks fell again, by 2.7m barrels which was higher than consensus of 1.5m but stocks at Cushing actually rose which wasn't part of the plan. In products it was also not such good reading either with gasoline reporting a rise in stocks of 460/- barrels when analysts had forecast a further draw, refinery utilisation fell back from 94.6% to 93.1%, still quite a high number.
Tropical Storm Bill swept through the Gulf of Mexico and dumped more rain on Texas but it is as they say, blowing itself out and hasn’t caused any disruption to oil supplies.
Wood Group
Wood Group has announced what must be quite a big contract for Saudi Aramco, at least it is for six years plus two three year renewals and will employ 300 staff. For facilities in the Arabian Gulf including the establishment of an offshore engineering ‘centre of excellence’ at Al Khobar. The service stocks have been a mixed bag lately share-price wise and Wood has fallen back a bit after a strong run so far this year. There is little doubt that the 2nd quarter will have been the worst for a while but most companies are demonstrating significant resilience in the face of attempts by the majors to cut costs. With results coming in late August it is tempting to see how they look and of course half year trading updates may come in early July.
Egdon/EOG/Union Jack
News from Egdon that at Wressle-1 an extended well test is under way which will test the Ashover grit and then the Penistone Flags. These tests will determine the commerciality of the field and the best means to bring forward its development. I commented on EOG yesterday regarding its Irish assets which slightly complicate matters as they are still a very long way off but for Egdon things are more straightforward. Egdon has a very interesting drilling programme of conventional in the short-medium term and of course the…
