The good (cheap) oil. OPEC’s bi-annual meeting in Vienna tomorrow night is expected to be a brief one, according to OPEC Secretary-General Abdullah el-Badri. “Brief” means no change to the group’s policy of pumping 30 million barrels a day. In other words, no change and a continuation of oil prices half what they were a year ago when they peaked around US$115 a barrel (for Brent crude). Market hopes that OPEC might cut production had caused oil prices to edge higher, especially in US markets. The realisation they were fumes-induced dreams caused prices to slip 2% or more overnight, with US crude back under US$60 a barrel.

What markets didn’t like was talk of allowing production to drift up to 31 million barrels a day (formalising overproduction already in the market). But OPEC has to reach a deal that allows Iran to lift production by a million barrels a day once its deal with the US and European countries on its nuclear program is reached. Of course, no agreement would cause production to spike higher. Brent crude (the main global indicator) is around US$65 a barrel, US$20 a barrel above the lows hit in January. Not helping confidence was the rise in US production last week, up 2000 barrels a day to 9.59 million, while stocks fell nearly 2 million to be down 13.5 million in the past five weeks to a still massive 477 million barrels.  Both are supposed to be falling now, according to the script. Still no sign of that big slide in US shale output that the optimists have been seeing for the past two months. — Glenn Dyer

Axe, guillotine or loco? You can almost hear the blades being sharpened at the $11 billion value Aurizon, the old Queensland government railroad company. Uneasy investors have helped steel the board to replace the about-to-retire chairman, John Prescott, the old boss of BHP (before Billiton), with someone younger and with far more experience in infrastructure investment. The board hasn’t gone for another member of the corporate fossils club, it’s selected a 48-year-old top-flight fund manager and infrastructure expert in Tim Poole (who is also a former chair of Aurizon’s rail rival, Asciano).

Now that a much younger chair has been found (along with another younger non-executive director named in February), will those same restive investors force a move on the company’s foundation CEO, Lance Hockridge (who was a former report at BHP Steel under Prescott)? He’s been CEO since 2010 (the company was sold off by the Queensland government in 2012). Some investors are concerned at Hockeridge and the board’s plans for an investment in a Western Australian iron ore mine and railway at a time when the last thing the world wants is a new iron ore and railway, especially in oversupplied WA. Poole takes over as chair after Prescott steps down on September 1 and will have some big decisions at Aurizon, and in his own corporate life. — Glenn Dyer

Alms for the media poor. California recently expanded its system of tax credits for TV and film production with the aim of keeping productions in the state that Hollywood calls home, rather than allowing them to flee to other parts of the country. In fact, the state tripled the size of the retention fund to a rather fat and very juicy US$330 million. Reports yesterday are that those small but well-known production and media companies (battlers both of them) 21st Century Fox and Time Warner are likely to get tens of millions of help from the very tasty honeypot of taxpayer money to return or keep productions in the state. Eleven projects announced this week will get US$82 million in help. Fox is down for three, as is Time Warner. The two companies own two of the largest film studios in the world and are among the largest TV production groups in the world. — Glenn Dyer

Auditing the auditors. Just as Arthur Anderson was destroyed by the Enron scandal, people in the US and Europe are wondering if the growing FIFA bribery scandal might ensnare KPMG in a similar fashion. Marketwatch.com reported overnight how “FIFA auditor KPMG totally missed the soccer scandal”. Hmmm. Good point. The story pointed out that KPMG’s Swiss member firm:

” … is responsible not only for the audit of the multibillion-dollar umbrella FIFA organization, and has been since before the period under scrutiny by US and Swiss prosecutors, but also audits a large sample of member associations around the world that receive FIFA funding on an annual basis. KPMG also prepares a compilation of all financial reports after the completion of each four-year World Cup cycle.

“KPMG was also the auditor and adviser for the official Russia and Qatar organizing committees when they prepared the winning bids that are now targeted in corruption investigations in the U.S. and Switzerland.”

And there’s more in the story, which quotes Robert Appleton, a former US federal prosecutor, as saying: “KPMG absolutely should have caught, and called out, these alleged illegal activities.” The FBI is now investigating the awarding of the 2018 games to Russia and the 2022 games to Qatar, and there are now reports this morning that questionable payments were made in the case of the 1998 World Cup in France and the 2010 Cup in South Africa. KPMG seems to be in the firing line. — Glenn Dyer