1. Oil drops to its lowest levels in five weeks.
U.S. crude output is gaining ground, and that’s making everyone nervous. Oil prices are down to their lowest levels in over a month because OPEC and investors in general are simply not confident that the cartel’s supply cuts will have enough steam to override the US crude producers and get rid of the global glut. But it’s not just the U.S. Countries like Libya and Nigeria are adding to the supply. As they continue with their sustained recoveries, OPEC cuts lose more and more ground. An upcoming OPEC meeting on May 25th will determine if their cuts continue. However, many believe the decision is already made at this point, and this month’s meeting will just make it official.
2. U.S. Interior Secretary rallies for U.S. dominance in oil production.
On Monday, the 5th, U.S. Interior Secretary Ryan Zinke spoke at the Offshore Technology Conference in Houston, TX and made the case for the U.S. to continue tapping into its own natural resources and establishing itself as a dominate player in the global energy arena. His argument not only focused on the importance of U.S. energy independence, but also the fact that healthy U.S. production also helps to create economic checks and balances on other oil-producing countries such as Iran.
“Dominance is what America needs,” Zinke stated. And from the sound of his speech, that seems to be exactly what he plans to do.
3. $9.7B merger to create one of Canada’s largest infrastructure companies.
Canadian giant Pembina Pipeline announced the acquisition of Veresen on Monday, a C$9.7B deal. The transaction will result in one of the largest energy infrastructure companies in Canada. Pembina is a major midstream corporation that owns over 7,000 miles of pipelines, mainly in Alberta, Canada. Veresen owns significant gathering infrastructure in Alberta, and a 50% interest in the Alliance Pipeline, an 1,800-mile pipeline transporting gas from Alberta to Chicago. The merger between the two companies is anticipated to help them more easily finish and profit from ongoing pipeline projects.