1. OPEC meeting today with non-cartel meetings to discuss compliance to supply cuts.
OPEC is holding a technical meeting with non-cartel members in Vienna today (Monday) to discuss compliance levels on the previously agreed upon supply cuts. Russia is the largest non-cartel member, and agreed to work with the cartel to reduce production through March of 2018, but compliance with the agreement hit its lowest level this year in July, at 75%, according to the International Energy Agency’s latest monthly report. The news from last month combined with no substantial statements from today’s meeting are the contributor to the drop in oil prices today. They’re down for the first time in three sessions, wiping out most of the gains from previous sessions.
2. U.S. destroyer collides with Libyan oil tanker in Singapore Straight.
The USS John S McCain, a U.S. destroyer, collided with a Libyan oil tanker on Sunday afternoon in the Singapore Straight. Currently, ten sailors are reported missing by the U.S. Navy and four others have been hospitalized with non-life-threatening injuries.
The destroyer was making a routine port stop in Singapore and the tanker was carrying about 12,000 tons of crude oil from Taiwan to Singapore. There were no oil spills reported from the incident and no crew members from the oil tanker reported major injuries.
This is the second collision in the last three months that has occurred with U.S. Naval ships, and investigations are underway to understand the cause and corrective actions going forward.
3. French energy giant Total to buy Maersk Oil in a $7.5B deal.
Total, the French energy company, announced it has reached a deal to buy Maersk’s (a Danish shipping container company) oil and gas business for $7.45B. Total CEO, Patrick Pouyanne, stated the new acquisition will strengthen its operations in the North Sea, boost earnings and improve cash flow. This is the largest purchase for Total since its acquisition of Elf in 2000.
For Maersk, the sale of Maersk Oil, along with its reserves of approximately 1 billion barrels of oil, will help them to focus on their core business of shipping containers and avoid being spread too thin across multiple industries.