Tuesday, 10 July 2012

Oil markets breathe easier after Norway deal

In this Monday, July 2, 2012, photo, tanker trucks take on loads of gasoline and diesel fuel at Arkansas Terminaling and Trading Inc., in North Little Rock, Ark., before making daily deliveries to retailers. The price of oil climbed nearly 2 percent Monday, July 9. 2012, as Norway prepares for a shutdown of its North Sea crude production. (AP Photo/Danny Johnston)

In this Monday, July 2, 2012, photo, tanker trucks take on loads of gasoline and diesel fuel at Arkansas Terminaling and Trading Inc., in North Little Rock, Ark., before making daily deliveries to retailers. The price of oil climbed nearly 2 percent Monday, July 9. 2012, as Norway prepares for a shutdown of its North Sea crude production. (AP Photo/Danny Johnston)

(AP) ? Oil markets breathed a sigh of relief Monday as the Norwegian government ordered a settlement in a labor dispute that could have forced the industry to prepare for a historic shutdown in the North Sea.

Norway's oil fields, which produce more than 3.8 million barrels of oil and natural gas per day, had faced a potential shutdown if the industry didn't resolve a dispute over employee retirement benefits.

Workers had been on strike since June 24, and the country's oil industry had said a lockout would begin at midnight.

Government-owned Statoil SA says it will resume production after the government ordered arbitration.

The Norwegian Oil Industry Association said the country has never experienced a total shutdown of its oil fields. A lockout would have affected about 6,500 workers.

Any production stoppage would have seriously crimped European oil supplies, cutting off a major source of crude as the European Union officially begins an embargo of Iranian oil. Norway exports most of its crude to the United Kingdom, the Netherlands, France and Germany. American refineries also buy a small amount of oil from Norway.

Before the back-to-work order came, benchmark U.S. crude rose $1.54 to end the day at $85.99 per barrel in New York. Brent crude, which comes from the North Sea and sets the price for oil imported into the U.S., added $2.13 to finish at $100.32 per barrel in London.

In other futures trading, heating oil rose 4 cents to end at $2.75 per gallon and wholesale gasoline rose by 4 cents to finish at $2.76 per gallon. Natural gas rose 11 cents to finish at $2.88 per 1,000 cubic feet.

Associated Press

Source: http://hosted2.ap.org/APDEFAULT/f70471f764144b2fab526d39972d37b3/Article_2012-07-09-Oil%20Prices/id-740281c0558d42849d82ef9ea60ac4e7

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