- Oil production will be back to normal in three days: KPC
- Union ended strike after minister pledged no talks during halt
Kuwait’s oil production is set to return to normal in three days after thousands of striking workers returned to their jobs Wednesday.
OPEC’s fourth-largest producer will boost output to an average of 3 million barrels a day in three days, Kuwait Petroleum Corp. said Wednesday. The company was working to boost output from 1.5 million barrels a day on Tuesday after a gain from 1.1 million Sunday. Oil refineries are still operating at about 520,000 barrels a day, Khaled Al-Asousi, spokesman at state refiner Kuwait National Petroleum Co., said in a text message. Plants had been operating at that rate, less than 60 percent of capacity, since the strike began on Sunday.
The 13,000 members of the Oil & Petrochemical Industries Workers Confederation went on strike to protest cuts in pay and benefits as Middle Eastern crude exporters reduced subsidies and government handouts to cope with falling oil prices. A global glut of crude has pushed prices 32 percent lower in the past year. Worldwide supply surpassed demand by 1.5 million barrels a day in the first quarter, according to the International Energy Agency.
“With that crude coming back, I don’t see the market being able to add much more to prices,” Edward Bell, a commodities analyst at Dubai-based bank Emirates NBD PJSC, said by phone Wednesday. Oil should trade at $35 to $45 a barrel for the next several months, he said.
Brent crude fell as much as 2.8 percent, to $42.81 a barrel, and traded at $43.53 at 12:55 p.m. in London. Last month, before the walkout, Kuwait was pumping 2.8 million barrels a day, trailing Saudi Arabia, Iraq and Iran, according to the IEA. The initial decline of 1.7 million barrels a day from March levels surpassed the surplus in global supply.
“Returning progressively to the normal production levels may take about three days, returning to the previous level of an average of 3 million barrels a day,” according to a statement by the oil industry’s spokesman, Sheikh Talal Al-Khaled Al-Sabah, posted on the KPC website.
The country’s three refineries will boost crude-processing rates over the next three days to the level prior to the strike, KNPC’s Al-Asousi said. The refineries have total capacity of about 900,000 barrels a day.
The union agreed to have its members return to work on Wednesday after successfully showing the importance of their role in the economy, KUNA, the country’s official news agency said, citing a statement from the union. The report came soon after Anas Al Saleh, the acting oil minister, said on Alrai television the government wouldn’t hold negotiations as long as a strike continued.
“The goal in going on strike was to send a clear message,” the Oil & Petrochemical Industries Workers Confederation said in the statement. “The workers reiterated in their action their role” in the economy, the union said.
Kuwait’s crude output climbed to 1.5 million barrels a day Tuesday as the state oil company brought more production back online. Production in northern Kuwait returned to normal and Kuwait Petroleum Corp. restarted units in the country’s southeast, helping boost overall output, the oil industry’s spokesman, Al-Sabah said in a post on Instagram on Tuesday.