Tuesday- Slow News Day
Posted by zmann on October 10, 2006
— Oil Slide Expected To Continue, Despite Opec, Nigerias Best Efforts. Oil futures are showing a modest pullback this morning, down $0.48, to $59.48. Stop falling! Stop, the brothers in the cartel demand it! We just can’t put anything official in writing yet, but we will so watch out! Give me a break, I’ve seen better organized 5 year old soccor teams. They have 11 men on the field too but at they’re all (generally) trying to kick the ball in the same direction. Like I’ve said in recent days, its time to sell the “news”. Nigeria, for its part is trying to get oil prices up by letting another Shell platform fall into the hands of rebels along with more of its soldiers. Do they get hostage pay? Do you notice how, unlike in other hostage taking areas of the world, the rebels almost always release the hostages unharmed within a few days. Sounds like an oil for hostage program has been worked out. You can probably even chart oil vs hostages with good correlation but data is a bit unreliable.
— Analyst Watch. Not to be pinned down and say they missed a call, Goldman Sachs uppdc APC and DVN to buy from neutral this morning while downgrading MUR and XOM to neutral from buy. I haven’t seen the impact on numbers yet and will follow up but I’ll bet a nickel they’re all down. I’m torn on the recommendation as well since I’ve got puts on APC and MUR at present. The negative call on XOM won’t be good for the group however, and this week’s expected weakening in oil and correction in natural gas will drag APC with it after a fleeting moment in the sun.
— BP Watch. BP is being cagey about their maintenance activities at Prudhoe Bay. They began an expected 2 week cleanup period on Sept 30 (cleaning and pigging) and will use a smart pig to check corrosion levels but so far have not done that. Line slack vibration has been noted in the Alaska pipeline (vibration caused by it being less than full while not being perfectly flat so that oil speeds up and slows down within the pipe) but is said to be no big deal. We’ll see but I don’t trust those guys, they’ll find a way to get before Congress due to something else soon.
–Putin to foreign oil companies, “who needs you?” Gazprom announced that the giant (3.6 Tcf) Shtokman natural gas field in the Barents Sea does not need the participation of 5 shortlisted companies (TOT, COP, CVX, STO, NHY) in the project. Taken together with the still brewing Saukilin Island controversy, Russia is increasingly looking less like a honey pot for Big Oil and more like a gulag.