Kuwait oil strike began Sunday
Analysts say a Kuwait oil strike that began Sunday may help balance the over-supply of crude that has driven down the price of oil in recent months to 12-year record lows.
The strike involving 13,000 members of the Oil & Petrochemical Industries Workers Confederation began on Sunday, the same day participants at the meeting in Doha failed to come to an agreement on production limits.
The collapse in talks amongst many of the world’s leading oil producers led to a drop in oil prices.
The Kuwait labor strike has cut the country’s output by 60 per cent, about 1.7 million barrels a day, which is slightly more than the global surplus noted in the first half of the year.
Speaking with Bloomberg, Harry Tchilinguirian, head of commodity markets strategy at BNP Paribas SA said “If the potential loss of Kuwaiti crude supply is sustained long enough, that is roughly equivalent to current estimates for the global stockpile build in the second quarter”.
Tchilinguirian added “of course, there is a big ‘if’ in terms of how long the strike will last”.
Citing oil industry spokesmen Sheikh Talal Al-Khaled Al-Sabah, the Kuwait News Agency reported Kuwait Petroleum Corp. is working to resume its operations at two of the company’s crude gathering facilities.
Workers with Kuwait Petroleum Corp. are protesting cuts in wages and benefits.