Kuwait oil workers say they'll end a strike that disrupted output in OPEC's fourth-largest producer for three days, after the government said it wouldn't negotiate while the walkout lasted.
(Bloomberg) -- Kuwait oil workers said they’ll end a strike that disrupted output in OPEC’s fourth-largest producer for three days, after the government said it wouldn’t negotiate while the walkout lasted.
Workers will resume their jobs at 7 a.m. local time on Wednesday out of respect for the country’s emir after successfully showing the importance of their role in the economy, KUNA, the country’s official news agency said, citing a statement from a labor union. The report came soon after Anas Al Saleh, the acting oil minister, said on Alrai television the government wouldn’t hold talks with workers as long as a strike continued.
“The goal in going on strike was to send a clear message,” the Union of Petroleum and Petrochemical Workers said in the letter. “The workers reiterated in their action their role” in the economy, the union said in the statement in Arabic.
The workers went on strike to protest cuts in pay and benefits as Middle Eastern crude exporters reduce subsidies and government handouts. A global glut of crude has pushed prices 30 percent lower in the past year. Worldwide supply surpassed demand by 1.5 million barrels a day in the first quarter, according to the International Energy Agency.
West Texas Intermediate futures, which settled 3.3 percent higher on Tuesday as the strike in Kuwait cut output, fell 1.8 percent to $40.35 as of 8:14 p.m. in New York.
Kuwait’s crude output climbed to 1.5 million barrels a day Tuesday as the state oil company brought more production back online after halting some operations at the start of the strike.
Production in northern Kuwait returned to normal and Kuwait Petroleum Corp. restarted units in the country’s southeast, helping boost overall output, the oil industry’s spokesman, Sheikh Talal Al-Khaled Al-Sabah, said in a post on Instagram earlier. Output was 1.1 million barrels a day on Sunday, when the 13,000-member union started the stoppage.
Before the walkout, Kuwait was pumping 2.81 million barrels a day last month, making it the fourth-largest producer in the Organization of Petroleum Exporting Countries. The initial decline of 1.7 million barrels a day from March levels surpassed the surplus in global supply.
State refiner Kuwait National Petroleum Co. slowed operations at its three oil-processing plants to about 520,000 barrels of oil a day, less than 60 percent of capacity for a third day, spokesman Khaled Al-Asousi said in a text message on Tuesday. Natural gas production rose to 700 million standard cubic feet a day from 620 million Sunday, he said.
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Copyright 2016 Bloomberg News.
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