1. OPEC announced it's intentions to cut oil production by 700,000 barrels per day.
After meeting Wednesday in Algiers, Algeria, OPEC released a statement stating their intent to reduce production clarifying their reasoning and intentions. The Organization said, “In the last two years, the global oil market has witnessed many challenges, originating mainly from the supply side. As a result, prices have more than halved, while volatility has increased. Oil-exporting countries’ and oil companies’ revenues have dramatically declined, putting strains on their fiscal position and hindering their economic growth.”
While the arrangement is sizable, most oil experts don’t feel the reduction is drastic enough nor expedient enough to return the oil market back to equilibrium.
2. New Norwegian oil and gas producer emerges.
On Friday, British energy giant BP and a Norwegian energy company Det norske officially created Aker BP, an independent company that is now the largest independent Norwegian oil and gas producer. With the formation of Aker BP, BP is staking claim on their piece of the giant Johan Sverdrup oil field, where Det norske has a minority interest.
Initial operations of Aker BP are projected to yield up to 380,000 barrels of oil per day, approximately half of the expected peak production rate. Once in full capacity is reached, Johan Sverdrup (The 5th largest discovered oil field off the coast of Norway) should produce nearly 25 percent of all Norwegian petroleum production.
3. Significant events in the upcoming week.
Tuesday, October 4th the American Petroleum Institute is scheduled to publish its weekly report on U.S. oil supplies.
Wednesday, October 5th the U.S. Energy Information Administration is set to release weekly data on oil and gasoline stockpiles.
Friday, October 7th Baker Hughes will release weekly data on the U.S. oil rig count.