Mar 12, 2020 - Economy & Business

Investor Carl Icahn increases his stake in Occidental Petroleum

Carl Icahn. Photo: Heidi Gutman/CNBC/NBCU Photo Bank/NBCUniversal via Getty Images

Carl Icahn increased his stake in Occidental Petroleum from 2.5% to nearly 10%.

Why it matters: Icahn has been feuding with Occidental since last summer, believing his $38 billion takeover of Anadarko Petroleum was too expensive and poorly structured.

  • Now he's taking advantage of macro conditions (coronavirus, Saudi-Russia deal collapse, etc.) to strengthen his hand, as Occidental's market cap has fallen to $10.5 billion and it just slashed its dividend for the first time in 30 years.

Icahn wants control, which would include a new CEO and a new board of directors.

  • The bottom line: "Many shale producers including Occidental were struggling to turn a profit even before the coronavirus and tension among big oil-producing states sent crude prices down sharply. Occidental is particularly vulnerable given its high debt level — roughly $40 billion at last count," writes the Wall Street Journal.

Go deeper: What the oil market's collapse means for the climate

Go deeper

U.S. crude oil production to dip for the first time since 2016

Data: EIA; Chart: Naema Ahmed/Axios

This week the Energy Information Administration issued a forecast that shows U.S. crude oil production dropping next year on an annual basis for the first time since 2016 to average 12.7 million barrels per day in 2021.

Why it matters: It comes alongside a wave of announcements that U.S. producers are scaling back operations and cutting spending thanks to the collapse in oil prices. Together, the findings help show how the price declines and coronavirus-induced demand loss are affecting the industry.

Trump's hopes and plans for the oil market

Photo: Win McNamee/Getty Images

Oil prices climbed Thursday morning as traders are responding to President Trump's comments yesterday evening that Russia and Saudi Arabia could soon mend fences on oil supply policy, per the Financial Times.

Driving the news: Trump told reporters that he believes, based on his recent calls with Russian President Vladimir Putin and the Saudi crown prince, that "they will work it out over the next few days."

Oil prices plunge as market absorbs OPEC-Russia split

A Kuwaiti trader checks stock prices at Boursa Kuwait in Kuwait City, on March 8, 2020. Photo: Yasser Al-Zayyat/AFP via Getty Images

Oil prices nosedived to four-year lows Sunday as trading resumed after Friday's collapse of the OPEC-Russia production-limiting pact, a rupture slated to increase supplies at a time when the novel coronavirus is sapping demand.

The state of play: The immediate 31% collapse when trading resumed last night was the second-largest on record behind the 1991 Gulf war, Bloomberg reports.