Interest rates are expected to remain on hold tomorrow as the recent fall in oil prices eases pressure on the Bank of England for an imminent hike. The Bank rate has been left at 0.5% for more than five years but expectations of an upward move have dwindled in recent weeks due to global economic worries and signs that the housing market is cooling. Despite strong UK growth, the majority of members on the Bank’s monetary policy committee (MPC) are worried that a rise will choke off the recovery at a time when the eurozone is in danger of plunging back into recession. Policymakers will have access to the Bank’s latest quarterly projections but these are likely to show inflation is less of a threat due to falling shop prices and oil market weakness.
Russia’s rouble currency is hitting an all-time low as the country’s economy struggles with the combined blows of western sanctions and a worldwide fall in oil prices. In trading on the MICEX exchange, the rouble dropped to 44.9 to the US dollar late today - about a three per cent fall for the day. The rouble has lost more than 25% of its value this year.
Neon Energy is set to merge with MEO Australia after it became involved in a takeover bid. It is hoped the move will reduce overhead costs of the two companies, from $8.5million to $3.5million per year. The company is expected to form with a net cash income of $37million and a board will be formed of the merged groups, comprising two directors from Neon, and two directors from MEO.
SBM Offshore has completed $450million of non-recourse senior debt secured through a US Private Placement (USPP) for the Deep Panuke Production Field Centre (PFC). The company said the 3.5% fixed coupon bond is rated BBB -/ BBB (low) by Fitch and DBRS, and carries a seven year maturity. In a statement the company said offering was oversubscribed, with 14 institutional investors participating.
Oil tumbled as Saudi Arabia cut the cost of its crude to the U.S., deepening a selloff that sent prices to a three-year low. Bonds advanced, while U.S.-equity index futures declined. West Texas Intermediate crude slid 2.6 percent to $76.75 a barrel at 6 a.m. in New York, after reaching $75.84. The yield on 10-year German bunds fell four basis points to 0.81 percent and Italy’s rate dropped four basis points to 2.38 percent. Standard & Poor’s 500 Index futures both slid 0.2 percent and the Stoxx Europe 600 Index lost 0.1 percent. Japan’s Topix index jumped 2.6 percent to a six-year high. Oil prices fell into a bear market last month as global demand growth slowed and supplies swelled from producers outside OPEC, with the U.S. pumping at the fastest pace in more than three decades. Declining commodities prices are contributing to slower inflation around the world, helping preserve the value of fixed payments on bonds. Alibaba Group Holding Ltd. will report earnings before U.S. markets open.
Encana Corp has extended a deadline to buy outstanding shares of common stock of Athlon Energy at $58.50 a share until next week. The deadline, set to US east coast time, will see the chance to purchase shares stop at 12am, Wednesday, November 12. The offer had previously been scheduled to expire at midnight at the end of this week but the company said based on information provided by the depository for the offer 35,302,143 shares of common stock of Athlon had been validly tendered, but not validly withdrawn from the offer.
Talisman Energy has seen its cash flow drop by 11% from the last quarter. The firm dipped oil prices and lower liquid volumes fro the fall. Talisman said its North Sea production averaged at 12,000BOED, which was down 37% from the previous quarter and 43% year-over-year. The dip in production was a result of planned turnarounds at Claymore, Piper, Buchan and the Bleoholm FPSO.
A positive session for corporate earnings ensured the FTSE 100 Index made progress despite a poor performance from heavyweight oil companies. Shares in Imperial Tobacco, Primark owner Associated British Foods and Legal & General were all higher after posting well-received figures. The FTSE 100 Index, which closed sharply lower on Monday due to disappointing manufacturing data in a number of countries, was 16.9 points higher at 6505.2.
Saudi Arabia, the world’s biggest oil exporter, is telling the market it won’t cut output to lift crude back to $100 a barrel and that prices must fall further before it does so, according to consultant FACTS Global Energy. Swelling supplies from non-OPEC producers drove Brent crude into a bear market on Oct. 8 amid waning demand from China, the world’s second-largest importer. The Organization of Petroleum Exporting Countries meets Nov. 27 to consider changing its production target in the face of the highest U.S. crude output in almost 30 years. “Production of shale oil in the U.S. will not be hit as hard as the Saudis think” by the price decline, FGE Chairman Fereidun Fesharaki said at a conference today in Doha, Qatar. Producers in the U.S. “can withstand a lot of pressure” by reining in their operating costs before they curb investment in new wells and production, he said.
Foster Wheeler's profits have slumped with the company’s income down by half in its third quarter results. The company announced its income from operations was $25.4million, compared with $48.9million the same time last year. Shares are currently sitting at an individual price of $0.25, compared to a cost of $0.50 during the third quarter of 2013.
Chevron's profits have risen for the third quarter income for the first time in three years. The oil major credited refining costs as one of the key factors in boosting their revenue. However the company did see a slight drop in its sales and operating revenues for the third quarter, pulling in $52billion, compared with $57billion last year.
West Texas Intermediate crude headed for the biggest monthly decline in more than two years amid signs that OPEC boosted production to a 14-month high. Brent slid in London. Futures fell as much as 0.6 percent in New York, bringing October’s drop to about 11 percent. Output from the 12-member Organization of Petroleum Exporting Countries increased by 53,000 barrels a day to 30.974 million, a third monthly gain, a Bloomberg survey shows. Traders are split on whether Saudi Arabia will deepen the crude price cuts that propelled oil into a bear market this month. WTI and Brent are down more than 20 percent from their June peaks, meeting a common definition of a bear market, as leading OPEC members resisted calls to reduce supply. Global supplies are rising, with the U.S. pumping at the fastest pace in more than three decades while Russia’s output climbed to near a post- Soviet record. “OPEC members are keeping prices low by raising their production as a way to remain competitive against the expanding output in the U.S.,” Will Yun, a commodities analyst at Hyundai Futures Inc. in Seoul, said by phone today. “Positive economic data we saw from the U.S. failed to provide an upward push to oil as supply concerns are too deeply rooted.”
Carbon copy investment companies found by a court to have misled clients have been ordered into liquidation. Both Carbon Green Capital and Agora Capital were found by the High Court in London to have made false claims about investment returns. A petition against the companies was presented to the High Court by the Secretary for Business, Innovation and Skills, Vince Cable. The companies were accused of selling carbon credit investments which were misleading, raking in almost £1million in profit. Chris Mayhew, Company Investigations Supervisor, said: “This formally brings to an end the activities of two heartless companies that claimed to pride themselves on the investment returns for clients but who in truth were peddling near worthless carbon credits, which in some instances they even failed to supply, raising approaching £1million from the public”. “Far from the claimed world class investment services dedicated to helping clients, these companies were dedicated only to helping themselves. “I would once more urge investors not to respond to cold calling investment sharks as you stand to gain nothing and risk losing everything. Simply end the call, not your savings. “The Insolvency Service will not allow rogue companies to rip-off vulnerable and honest people and will investigate abuses and close down companies if they are found to be operating or about to operate, against the public interest."
The reasons oil prices started sliding in June were hiding in plain sight: growth in U.S. production, sputtering demand from Europe and China, Mideast violence that threatened to disrupt supplies and never did. After three-and-a-half months of slow decline, the tipping point for a steeper drop came on Oct. 1, said Ray Carbone, president of broker Paramount Options Inc. That’s when Saudi Arabia cut prices for its biggest customers. The move signaled that the world’s largest exporter would rather defend its market share than prop up prices. “That, for me, was the giveaway,” Carbone said in an Oct. 28 phone interview from his New York office. “Once it started going, it was relentless.”
Shell recorded a third quarter boost thanks to its refining and natural gas assets.
Technip confirmed a 12% profit decline in its third quarter results.
Norwegian oil, gas and renewables engineering and construction firm Aibel is set to cut 300 jobs. The company said the employees in Stavanger, Oslo, Haugesund and Stjordal would be affected by the move.
Roc Oil Company (ROC) has announced its third quarter results with production dropping by 6% following platform shutdowns. The company recently announced it would be taken over by Fosun International in a $441million deal.
UK Oil and Gas (UKOG) has submitted a bid for a 200km area covering the Southern part of the Isle of Wight as part of the UK 14th landward licence round. The company said its board had drawn the first $1million of a new $10million unsecured debt facility to submit its application.
Total SA Chief Executive Officer Patrick Pouyanne, who replaced Christophe de Margerie following a fatal plane crash, will stick to his predecessor’s effort to cut costs, sell assets and boost output after profit declined.
Total has agreed to sell off its interests in a number of Norwegian assets for $317million. An agreement has been signed by Total E&P Norge AS to sell off 8% of its shares in the Gina Krog field, together with its interests in the mature fields of Vilje and Vale at 24.23% and 6% share in Morvin to PGNiG Upstream International.
Private equity giant Warburg Pincus has raised £2.5billion for an energy fund that will target exploration and production plays across the world, including the North Sea.
Goldman Sachs Group Inc. cut its forecasts for Brent and WTI crude prices next year on rising global supplies, predicting OPEC will lose influence over the oil market amid the U.S. shale boom.
Salamander Energy could become involved in a bidding war after being approached by Ophir Energy and a consortium led by Compania Espanola de Petroleos (CEPSA) and Jynwel Capital. The company said it was currently in talked with both Ophir and the CEPSA Consortium regarding their respective proposals.
Occidental Petroleum Corp. Chief Executive Officer Stephen Chazen said companies that help explorers find and drill for oil will lower their fees to maintain market share if crude prices continue to slump.