This week is turning out to be the best in a long time for fans of North American oil production.
The week started with huge news from Kuwait, where more than 7,000 oil workers walked out on strike over the weekend in protest of proposed wage and benefit cuts for public-sector employees. In the three days since the walkout, industry reports estimate the work stoppage has more than cut Kuwaiti crude oil production in half, a reduction of at least 1.5 million barrels per day.
And with no “sign [of] when we will have a resolution for this,” MarketWatch reports, the strike has injected a much-needed a shot of life in the domestic oil market.
CNBC reported U.S. oil prices jumped by more than 3 percent on Tuesday, ending a four-day slide and providing a temporary respite from what continues to be a bearish year.
CNBC reports indicate the Kuwaiti government will most likely compromise with workers quickly to avoid a prolonged drop in production, but to this point no resolution have been publicly announced. In the unlikely event of a long-term shut down, CNBC reports Kuwait would most likely bring in a foreign staff to resume full production.
In the meantime industry experts believe Eurasian oil producers will be the largest direct beneficiaries of the shutdown.
But while the Kuwaiti strike has rightfully dominated the global news market, that’s not the only encouraging step toward kick starting more production at home.
The Department of Energy reported Monday that diesel fuel prices rose for the eighth time in nine weeks for the week ending April 18, clocking in 3.7 cents higher than last week at $2.165 nationwide. The 3.7 cent national increase was even higher in the Gulf Coast, where prices rose by more than 5 cents week-over-week.
Since ducking under $2 on Feb. 15, diesel is up nearly 20 cents. The national average has been below $3 since January 2015.
Its unclear yet if North America’s uptick is a temporary change or the reversal of the status quo, but in any event, when coupled with the labor issues in the Middle East, it gives North American oil production some much needed positive news.
