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Brent Crude Oil

Oil prices rise, but BP, Shell, BG Group, Petrofac, Melrose and Heritage slide

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Crude was higher today, mostly due to a weaker US dollar. The American currency has been in decline against the euro since Friday, when European leaders reached an agreement on a rescue package for Greece to provide the troubled country and Europe’s single currency with immediate relief and improve the outlook for Europe’s debt crisis. The euro extended gains today, pushing the US dollar further down to make dollar-denominated commodities such as crude cheaper for holders of other currencies.

Oil got some support by an improved demand outlook amid a rally in European and Asian stock markets late last week and bullish US jobless claims data that showed a steeper than expected decline of 14,000 in initial jobless claims last week to 442,000. The recovery in the commodity market, however, was stopped by the downward revision of US GDP growth in the final quarter of 2009 that was announced on Friday, showing a drop from 5.9% to 5.6%.

Investors will be looking to the US employment data, which is due out on Friday.

May Brent Crude improved to US$81.24/barrel, while US light, sweet crude reached US$82/barrel.

Blue chip oil and gas producers didn’t show much movement today. Supermajors BP (LSE: BP) and Shell (LSE: RDSB) shed less than 1%, as did BG Group (LSE: BG), while Tullow Oil (LSE: TLW) was flat and another FTSE 100 constituent Cairn Energy (LSE: CNE) added nearly 1%.

Amec (LSE: AMEC) was flat, while fellow oil and gas engineering firm Petrofac (LSE: PFC) lost 1%.

Midcaps were mixed. Dana Petroleum (LSE: DNX), Melrose Resources (LSE: MRS) and Heritage Oil (LSE: HOIL) were in decline, shedding 2.3%, 1.6$ and 1% respectively. Premier Oil (LSE: PMO) and Salamander Energy (LSE: SMDR) were flat, while Dragon Oil (LSE: DGO) gained less than 1%.

Soco International (LSE: SIA) and JKX Oil & Gas (LSE: JKX) outperformed their peers, climbing 2.1% and 1% respectively.

Services companies headed in different directions as while Wood Group (LSE: WG) posted a small loss, Wellstream Holdings (LSE: WSM) advanced 1.5%.

Irish oil and gas exploration company Petroceltic International (AIM: PCI) was one of the best performers in the sector, advancing 9.5% after raising US$120 million. Africa focused energy company Dominion Petroleum (AIM: DPL) also did well, climbing 4%.

Mongolia-focused Petro Matad Ltd (AIM: MATD), North America focused oil & gas junior Pantheon Resources (AIM: PANR) and Europe focused oil and gas developer Ascent Resources (AIM: AST) headed in the opposite direction, sliding 8.4%, 7% and 5% respectively.

Quick facts: Brent Crude Oil

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Market: LSE
Market Cap: £0.00
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