Australian LNG

A quick update in big iron and gas share prices is a bit of fun today.

Low.

The big resources bear market rally is off and running with BHP up 4.2%, RIO up 3.2% and FMG up 3.5%: This is pretty mild stuff for a short squeeze suggesting either that it has not gotten going yet or it isn’t going to.

The Brent oil price took off last night and is at $37.63 as I write.

Some relief today for big iron, finally, with BHP up 3.5%, RIO up 5% and FMG up 4%: Dalian is down a point of two so it’s not that.

From the AFR: Oil giant Royal Dutch Shell has told shareholders the $US53 billion takeover of BG Group will act as a “springboard to change and reshape” the group, and outlined plans for job and spending cuts, as well as $US30 billion of asset sales that look certain to affect the business in Australia.

From Macquarie Bank: ORG has stayed a re-emerging financial risk that in a low oil price environment APLNG will require a cash injection to establish the debt service reserve ie 6 months of interest expense and debt amortisation (~$750m) along with the opex reserve (~$700m) instead of internal earnings.

The Brent oil price lifted a little overnight after keeping its head just above GFC lows and is trading at $36.31 as I write.

From the AFR: Origin Energy has acted to protect itself from a further dive in crude oil prices, paying $82 million for “put” options for oil and forward selling cargoes from its new $24.7 billion liquefied natural gas project in Queensland.

Big iron can’t catch a bid despite the rising ore price hinting firmly at a gathering de-rating for the sector, and not before time.

The Brent oil price is sitting right on its GFC lows after falling again last night to $36.17.

Big iron can’t find a bid today despite the incipient price rebound with BHP up 0.2%.

Brent oil was hit again Friday night to $36.68.

More falls today for big iron and gas but the hope is still plain as spreads between local and international prices widens.

Brent oil was hit again last night but held above GFC lows at $36.94 as I write.

The rally is struggling already.

From Bloomie: U.S.

Finally some relief for Trevor Sykes today as a dead cat bounce send BHP up 4.3%, RIO up 2.4% and FMG up 1.7%: I can’t see much future in it personally but perhaps Santa can outweigh reality for a little while.

It seems a rude question to ask given it has barely started pumping but we must ask it given it is probably going to happen. UBS offers some guidance: Our cash flow calculation includes minimum debt repayments, which for OSH is relatively significant (~US$300m/annum).

The Brent oil price took off last night before settling back to $38.43, up 1%, for no reason except markets got too short.

Brent oil was hammered last night to within a whisker of its GFC lows before bouncing back to $38.19 as I write.