Kuwait City: Oil fell after Kuwait workers said they would end a strike that disrupted output in the Organisation of Petroleum Exporting Countries’ (Opec) fourth-largest producer for three days.
Futures fell as much as 3 per cent in New York. Prices gained 3.3 per cent on Tuesday, the first advance in five days, after the protest reduced Kuwait’s production by as much as 1.7 million barrels a day.
The United States inventories probably increased by 3 million barrels last week, according to a survey before an Energy Information Administration report on Wednesday. That compares to industry data showing a 3.1 million-barrel gain.
Talks in Doha on Sunday between the world’s largest producers about capping production failed after Saudi Arabia insisted it wouldn’t restrain output without commitments from all Opec members, including Iran, which has ruled out freezing for now.
Workers in Kuwait went on strike to protest cuts in pay and benefits as Middle Eastern crude exporters reduce subsidies and government handouts amid the collapse in prices.
“The oil workers’ strike in Kuwait is over, leading to overnight pressure,” said Olivier Jakob, managing director of Petromatrix in Zug, Switzerland. “The strike was not expected to last for long.”
West Texas Intermediate for May delivery, which expires Wednesday, dropped as much as $1.23 to $39.85 a barrel on the New York Mercantile Exchange and was at $40.00. Prices on Tuesday rose 3.3 per cent to $41.08 a barrel. Total volume traded was about 36 per cent above the 100-day average. The more-active June contract fell 91 cents to $41.56 a barrel.
Brent crude for June settlement fell as much as $1.22, or 2.8 per cent, to $42.81 a barrel. The front-month contract on Tuesday gained 2.6 per cent to settle at $44.03. The global benchmark traded at a $1.56 premium to June WTI.
Kuwait’s workers were scheduled to resume their jobs 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 labour union statement.
The stoppage of the strike comes soon after Anas Al Saleh, the acting oil minister, said on Alrai television the government wouldn’t hold talks with workers as long as the walkout continued. The country will boost output to an average of 3 million barrels a day in three days, according to a statement from Kuwait Petroleum on Wednesday.