Welcome to the mid-week lull, after prices almost hitting $120, strikes and excitement at the Bakken shelf, markets are quiet and behaving themselves well.
BP reports that the Forties pipeline has resumed carrying oil and Grangemouth is back to normal. There are no planned discussions between UNITE, the union responsible for the two day strike from Sunday to Tuesday and Ineos, the owner of Grangemouth refinery. Another strike looks unlikely and North Sea production seems stable again.
Yesterday’s Federal Reserve meeting cut interest rates another 25 points but future cuts seem unlikely. This should suggest that the American economy is recovering but house prices are still weak so investor confidence could go either way. Today the price of oil is below $115 implying a return to equities but this will probably only last until the next gulf oil shock or subprime writedown.
BP and Shell announced suprisingly good results with profits of $6.6bn and $7.8bn respectively. BP especially has made a major turnaround under newly appointed chief executive Tony Hayward’s watch. They don’t seem like they’re resting on their laurels but such high profits in the future will be unlikely since restructuring coincided so fortuitously with an extreme jump in oil prices.
If you have any news on what’s happening during an otherwise quiet news day, please e-mail oil energy money at the usual address or comment below.
