The Oil Man: Oil price, Cairn, BP

WTI $48.19 -12c, Brent $48.93 -35c, Diff $0.74 -23c, NG $2.00 -5c

More of a technical day for the oil price yesterday, the Fed's April minutes came out and left the options open for a rate rise in June which made for a very strong greenback which left the oil price flat on its back. Data and news was very mixed, in Canada the blaze increased devastation by around 20% as measured by total acreage lost and started moving towards Saskatchewan. In Nigeria Eni had a pipeline blown up and more action was threatened by Niger Delta extremists.

On the data front it was another mixed bag from the EIA. Crude stocks built by 1.3 million barrels despite the rise in refinery runs ahead of the driving season but it was products again where all the fun was to be had. Echoing but even more strongly the API numbers, the EIA reported gasoline stocks drew by 2.5 million barrels which had been expected to be even and distillates drew 3.17 million much more than the modest expectation. Memorial Day is only 12 days away and expect the product market to exert the pressure…

Cairn/Far

The SNE-4 well offshore Senegal has come in extremely well, a gross oil column of 100 million and 108 million of continuous core taken across the oil bearing reservoir interval with 100% recovery is exceptional and confirms all the findings of the previous wells. Cairn's appraisal was at the eastern extent of the field and confirms the upper reservoir sands of similar quality to elsewhere in the field.

The well was drilled 5km to the east and down dip of SNE-3 and therefore confirms the field size which will continue to grow, they are setting gauges to allow progress on continuity which is most important. It seems that the reservoir model developed by Far has proved to be exceptionally accurate and gives them the edge when considering commerciality.

Whatever the operator says at present I am convinced that they will declare commerciality sooner rather than later, after all, as mentioned yesterday it looks like COP are soft selling all their exploration activities at the moment. Declaring commerciality would of course change its categorisation and I understand further complicate matters by transferring the operatorship to COP but they are still selling as we speak.

I notice that a publication yesterday suggested that Total may be the bidder for this which would make sense not least due to colonial history and if were true I suspect that they would not be interested in only the 35% on offer from COP…Selling a dream asset like this smacks as defining not only the bottom of the market but the insensitivity of an oil major many miles away, time to take advantage of the folk from Bartlesville, Oklahoma…

EnQuest

Not much new in the Enquest operational update this morning, production of 42,752 barrels per day is up 39% and full year guidance is still 44-48/- b/d. Kraken moves on as scheduled and the Scolty and Crathes tie-back is ahead of schedule and under budget. As with all other E&P companies costs continue to fall and opex is at around $25-27 which will fall to the low 20's when Kraken comes onstream. Net debt of $1.63 billion gets only a fleeting mention but the management, maybe for the first time, is less gung-ho about taking over the world and maybe even a seller of assets, how things change…

Sundry

BP has announced a £400 million bond issue which must tell you plenty about their plans for Bo's pay for the next seven years at least…

And FMC and Technip are to merge according to the tapes this morning, I will wait to see what the guru of such things, Alex Brooks at Canacord says about it…

And finally…

Its cold, wet and windy so it must be the morning of the first home test of the year, today at Headingley or Carnegie as we are expected to call it, if you dont mind I'll stick to Headingley. Sri Lanka will not like the conditions but I will still worry if we bat first, the Chef needs only 36 runs for 10,000 in test cricket.

Last night the HubCap Stealers defied the odds and lost 1-3 to Sevilla who seem to make a habit of winning this cup, unlucky maybe, a pen, probably but Moreno looked out of his depth, again.

So, Villa has been sold for £60 million, a ludicrous valuation, many clubs will spend more on individual players this summer, a Chinese takeaway without doubt. Villa say that they aim to be the best English club in China, just for the time being they aren't the best English club in the midlands any more…

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