Commodity Corner: French Labor Strife, Equities Boost Oil
Ongoing French labor unrest and its effect on the country's refineries and fuel terminals contributed to a $1.83 increase in the oil futures price Monday.
Crude oil for November delivery settled at $83.08 as French refinery workers, truckers, students, and others continued to strike in protest of the Sarkozy government's attempt to change the retirement age from 60 to 62. The retirement age increase, which would be fully phased in by 2018, has already been approved by France's National Assembly. The Senate is set to vote on the measure Wednesday, and strikers hope the civil unrest will pressure the upper chamber to kill Sarkozy's pension reform plan.
Strikers have prevented oil tankers from entering the major southern port of Fos Lavera, and all 12 of France's refineries have been shut down. Moreover, the protesters have attempted to block access to fuel terminals. An official with a fuel importers' group said Monday morning that roughly 1,500 of France's 12,000 retail fuel outlets have exhausted their supplies of some or all types of fuel.
Also having a bullish effect on oil Monday were rising equities markets, with the Dow Jones Industrial Average and S&P 500 each closing up more than 0.7%. Crude oil traded within a range from $80.35 to $83.08 Monday.
The price of a gallon of gasoline also surged, thanks to many of the issues affecting crude oil. Front-month gasoline settled a nickel higher at $2.15 after fluctuating between $2.09 to $2.155.
Thanks to a mix of abundant inventories and underwhelming demand as traders continue to await cold winter weather, November natural gas fell 10.4 cents to settle at $3.43 per thousand cubic feet. Gas traded from $3.44 to $3.53.