MW:Oil futures boosted by possible Norway shutdown
By William L. Watts, MarketWatch
FRANKFURT (MarketWatch) — Oil futures gained ground Monday on fears that Norway could see a total shutdown of oil production after the nation’s oil producers and striking offshore workers failed to reach agreement over the weekend.
Nymex crude futures CLQ2 +0.14% rose 45 cents to trade at $84.90 a barrel in electronic trade.
“A factor providing particular upside support for oil prices is the failed negotiations between the Norwegian oil industry association and employees of the industry,” wrote strategists at JBC Energy in Vienna.
News reports quoted the oil industry association as threatening to impose a total shutdown of offshore production at midnight Tuesday unless the government intervenes to halt a strike that has entered its third week.
The dispute centers on calls by oil workers for a blanket agreement that would allow offshore personnel to retire early with a full pension at 62, instead of 65, news reports said.
“The aim of [the oil industry association’s] lockout notice is to force the government into a decision for a compulsory settlement of the strike due to the fact that a higher national interest is at stake,” the JBC analysts wrote.
Norway is the world’s fifth-largest oil exporter.
Total Norwegian Continental Shelf oil and gas production has averaged 2.1 million barrels a day and 335 million cubic meters a day so far in 2012, according to latest figures from Ma, JBC analysts said. “Currently, already about 150,000 barrels a day of output capacity is offline due to earlier strike action and an additional 40,000 barrels a day are missing due to a production shutdown of Gullfaks A,” they said.
Oil futures ended lower on Friday after the U.S. Labor Department reported that the U.S. economy created only 80,000 new jobs in June, falling short of forecasts for growth of around 100,000. The unemployment rate was unchanged at 8.2%.
William L. Watts is MarketWatch's European bureau chief, based in Frankfurt.
