Oil dropped to session lows, with Brent futures sliding as much as 1.4% and hitting a session low of $42.74 after rising as high as $43.57 earlier in the session, after the Norwegian Oil and Gas Association said that a strike that shut down about 8% of Norway’s oil and gas output will end after successful mediation talks. The resolution also averts the shutdown next week of Norway’s largest oil field, the 460,000 barrel-a-day Johan Sverdrup facility.
As Bloomberg reports, the settlement will restore production at six fields already shut down by the dispute and prevent an escalation to another six over the weekend. Those facilities pump about 130,000 barrels of crude oil and 43 million cubic meters of gas a day. A prolonged walkout could have affected crude exports and helped boost global prices at a time when the market is struggling with slowing demand because of the coronavirus pandemic.
The strike had been called by the Norwegian Organization of Managers and Executives, or NOME, which is insisting companies agree to collective agreements for a handful of its members whose jobs have been moved onshore from offshore. The group was the only union in the country without an agreement for moving roles onshore, and so had broken with other labor groups in calling for the strike.