U.S oil prices rose more than 3 percent on Tuesday after a strike by workers in Kuwait nearly halved the OPEC member's crude production, overshadowing bearish sentiment after Sunday's failure by producers to agree to freeze output levels.
Brent crude futures, the global benchmark, were up $1.13, or 2.63 percent, at $44.04 a barrel, after rising as high as $44.50. U.S. crude futures for May delivery settled 3.27 percent higher, or $1.30, at $41.08, a new 2016 high, but still off a session peak of $41.53.
Post-settlement, crude retreated after API data reported a gain of 3.1 million barrels. The market had expected a gain of 640,000 barrels.
Thousands of Kuwaiti oil workers downed tools for a third day on Tuesday to protest against planned public sector pay reform, cutting crude output to 1.5 million barrels per day (bpd). That is little more than half of Kuwait's average output of 2.8 million bpd in March.
Kuwait's disruption would likely be brief and investors would soon focus back on the market's oversupply given the failure of major exporters on Sunday to agree to freeze output to avoid worsening the glut.
Reports of power outages leading to output declines of about 200,000 bpd in Venezuela and a pipeline fire in Nigeria that may have cut production by 400,000 bpd, along with the upcoming refinery maintenance season boosted the rebalancing of market and was supporting prices.
The rally was catalyzed by the S&P 500 index crossing a key level that triggered buying in oil and across commodities.
Other exporters who participated in the failed Doha talks have already shifted attention back to their own interests. Russia and Venezuela have indicated they hope to increase output this year. (CNBC)
Skangas duel fuel LNG carrier Coral Energy (image credit/Skangas)
Liquified natural gas (LNG) bunker tanker Coralius has made its first trip loading and delivering LNG to and from Norwegian ports, according to trade press reports.
The 5,800 cubic meter capacity tanker, which is owned by Norwegian gas company Skangas, was delivered to the company in June. Skangas also operates LNG carrier Coral Energy.
OPEC Cutback Extension to be Discussed in November, But Developments Could Render Any Deal Meaningless
Analysts say everything from Saudi exploration to rising tensions with North Korea could radically alter the dynamics of the international market. File Image / Pixabay
Ever since the Organization of the Petroleum Exporting Countries (OPEC) extended the duration of its production cuts earlier this year to March of 2018, speculation has been rampant that the meager cutback volume coupled with the large number of members