WTI (Dec) $72.36 +67c, Brent (Jan) $75.63 +71c, Diff -$3.27 +4c.

USNG (Dec) $2.70 -5c, UKNG (Dec) 106.25p +4.12p, TTF (Dec) €42.335 +€1.29.

Oil price

My comments yesterday are unchanged, whilst the onshore patch may not immediately benefit from a loose promise to drill baby drill, as independents maintain their iron discipline there will be an international boost as it is likely to see the US stop showing a blind eye to Iran’s nuclear development and thus a tightening of sanctions. LNG will also become a top priority as an incoming Trump administration sees revenue opportunities in abundance. 

China’s latest stimulus is worth some $1.4 trillion in itself not what the market had been hoping for I’m told. They are probably thinking about Tariffs at the moment…

US Oilfield Service companies, Hunting

I mentioned briefly yesterday in my oil price comment that on the arrival of President elect Trump that I would expect to see a significant increase in domestic drilling and whilst that would not on its own create a lot more production, the incentive will end the recent quiet spell in the US onshore patch. 

Yesterday saw the results from Halliburton which effectively completed the season and its figures missed the whisper, primarily blaming weaker North American revenues amongst other things. Previously Schlumberger had beaten the whisper, again marginally as did Baker Hughes last month. SLB got a boost but from the Gulf of Mexico and Canada so onshore USA was still under pressure.

Now I’m not expecting a dramatic rise in US drilling immediately but I do expect to see a much more favourable attitude towards drilling in all areas onshore and offshore with fraccing in particular seeing renewed activity. I am also expecting an increase in the exports of LNG as the US continues to fill the increasing worldwide demand especially if Trump policies hit competition in that market, here Baker Hughes have a strong deck. 

Hunting, as I said yesterday altered guidance recently claiming, like the others that the US onshore patch had been hit by lower oil and gas prices and remained subdued hitting both the Titan and perforating systems divisions. 

But the company has a very strong balance sheet with a huge order book of some $652m and a very high margin international business which continues to grow and accordingly I feel that the hit that the share price took was overdone, as it often is in this under appreciated stock and should have a minimum of a 50% bounce from these levels. 

And finally…

Last night in the Boropa Cup Galatasaray beat Spurs 3-2 whilst the Red Devils beat PAOK 2-0. In the Plate Chelsea put 8 on Noah whilst the Jam Tarts lost 0-2 to Heidenheim.

In the Prem on Saturday the Bees host the Cherries whilst in the London derby the Cottagers are off to the Eagles. The Hammers host the Toffees, the Saints are at Wolves, the Seagulls will fancy themselves at home to the Champions whilst in what was until recently a top of the table clash with Villa going to fortress Anfield. On Sunday the Foxes go to the Theatre of Dreams, Forest host the Magpies, the Tractor Boys are at White Hart Lane and in the big London derby the Gooners go to Stamford Bridge.

It’s another big weekend on the rugby front starting tonight as Ireland host the All Blacks at 2010. Tomorrow at 15.10 the Wallabies visit Twickenham (No I’m not just for sponsorship…) and on Sunday Wales play Fiji at 13.40 and the Springboks are at Murrayfield at 16.10.

England cricket stays in the Caribbean and play a T20 match against the WIndies at 2000 hrs on Saturday night.

And it’s Badger beer day at Wincanton, always worth a visit…