Oil Prices Fall as Labour Ends Strike in Norway
By Adedapo Adesanya
Oil futures settled downwards on Friday as there were reports of an end to the strike in Norway that threatened production.
The Brent crude went down by 49 cents or 1.13 per cent to $42.85 per barrel while the United States’ benchmark, the West Texas Intermediate (WTI) crude, lost 67 cents or 1.63 per cent to close at $40.60 per barrel.
Even with the slide, the benchmarks marked a week of over 8 per cent gains despite temporary factors such as Hurrican Delta, the strike action in Norway and President Trump’s coronavirus situation.
There were reports that Norwegian oil firms reached a wage agreement with labour union officials on Friday. The strike could have resulted in production cuts of just under 1 million barrels a day by next week.
The negotiator, Mr Jan Hodneland of the Norwegian Oil and Gas Association (NOG), said that they had reached an agreement with the Lederne trade union.
Oil firms and union officials met on Friday with a state-appointed mediator to try to end the strike in western Europe’s biggest oil and gas producing nation.
Friday’s meeting was the first with the state mediator since the strike was announced on September 30, although informal talks had been taking place.
On its part, the Hurricane Delta, which forced the shut-in of more than 90 per cent of the Gulf of Mexico’s crude output, also made its landfall, meaning that production would turn on again.
Meanwhile, Saudi Arabia is considering the postponement of plans for the Organization of the Petroleum Exporting Countries (OPEC) to raise oil production early next year to the end of the first quarter.
The country cited the rise in COVID-19 cases in many parts of the world, as well as the expected return of Libyan crude oil to the world market for rethinking the plan.
OPEC and its allies, collectively known as OPEC+, had agreed to cut overall oil output by 9.7 million barrels per day starting in May. The group tapered the cuts starting in August to 7.7 million barrels per day.