French Fuel Disruption to Worsen After Sunday Supply Shortage

French Fuel Disruption to Worsen
Tanker trucks queue for refill in front of the Total refinery of Donges, western France. Photographer: Jean Sebastien Evrard/AFP/Getty Images

Shortages at French fuel service stations will worsen today after insufficient deliveries yesterday, the refiners’ group Union Francaise des Industries Petrolieres said, as oil industry workers are striking to oppose the government plan to raise the retirement age.

“We didn’t supply much” yesterday “so the situation will be more difficult for everyone,” Jean-Louis Schilansky, head of the UFIP told Agence France-Presse yesterday. “And as we’ve given fuel in priority to highway stations, the rest will suffer a bit more during the day,” he added. Supplies were further reduced because truck drivers transporting fuel in France aren’t allowed to drive on Sundays, Schilansky said.

One quarter of France’s 12,300 stations faced supply disruptions yesterday. Workers at ports, refineries and fuel suppliers are opposing President Nicolas Sarkozy’s plan to increase the retirement age to 62 from 60. Workers pledged to maintain blockades ahead of the Oct. 28 demonstrations called by labor unions.

French imports of fuel rose to 100,000 tons a day from an average 20,000 to 25,000 tons in normal days, Schilansky said Oct. 23. “The situation in France starts having an impact on markets, costs are getting higher,” he said, Le Point weekly’s website reported. He said yesterday on France 3 television that France is pumping as much as 40,000 tons of fuel a day out of its strategic reserves.

Strike to Continue

“The strike will continue at least until Oct. 28,” CFDT union representative Fabrice Certain told France 3 late yesterday. “If and when refineries resume working, it will take at least 10 days for them to function properly.”

Supply will resume “slowly, progressively,” and seven districts, mainly in western France, still faced shortages, Raymond Soubie, Sarkozy’s aide, said yesterday on Europe 1 radio. The shortages are disrupting France’s week-long All-Saints holiday, which started Oct. 22.

After France’s Senate passed Sarkozy’s pensions overhaul bill Oct. 22, labor unions pledged to continue disruption and protest. “We’re asking the President not to enact this law,” CGT’s union chief Bernard Thibault told France 5 television network yesterday. Unions called for a 5th day of strikes on Oct. 28 and demonstrations on Nov. 6.

Shortly after Thibault’s remarks, Labor Minister Eric Woerth said “it is useless to strike today,” on France 3’s late evening news show. “The law is voted, it’s out of the question to debate this bill again.” Soubie said the legislation may be enacted Nov. 15.

Terminals Blocked

The port of Marseille, which supplies Fos and Lavera, France’s main oil terminals, has been blocked for 29 days, as refinery workers are demanding to retire earlier because they have so-called hardship jobs, according to the Confederation Generale du Travail, the biggest union among refinery, port, gas and power workers.

The port of Marseille said the strike has left 73 vessels stranded including 37 tankers carrying crude, 19 with refined products and 10 with natural gas.

Crude oil rose on speculation that growing French demand for imported fuel will reduce stockpiles elsewhere and on concern that a tropical storm may strengthen and head toward Mexican oil fields. Energy Minister Jean-Louis Borloo said Oct. 22 that France is “massively” importing fuel from European neighbors to face the shortage.

Hedge Fund Speculation

Hedge funds and other large speculators increased wagers on rising prices to 57,640 futures and options contracts for the week ended Oct. 19, the highest level since May 7, according to the Commodity Futures Trading Commission’s weekly Commitments of Traders report. The bets have risen by 58,809 contracts since the week ended Aug. 31, when wagers on declines outnumbered those on gains by 1,169 contracts.

Gasoline for November delivery rose 2.28 cents, or 1.1 percent, to settle at $2.0638 a gallon on Oct. 22 on the New York Mercantile Exchange. Prices dropped 1.9 percent last week, the second consecutive decline.

Supplies of the fuel to the U.S. East Coast, the nation’s main destination for European gasoline, dropped 13 percent to 53.5 million barrels from Sept. 17 to Oct. 15, according to the Energy Department in Washington. That’s the lowest level since the week ended Aug. 28, 2009. In the week through Oct. 15, the region received 585,000 barrels a day, or 25 percent less than the five-year average, according to the department.

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