Norway’s recent termination of a crucial strike and China’s move to reduce purchases caused oil to slide on Tuesday for the third time in less than a week.
Oil futures on the New York Mercantile Exchange dropped 1.6 percent, and Brent crude on the London-based ICE Futures fell 2.1 percent following news of the Norwegian government’s intervention into a strike that had already affected 15 percent of oil and 7 percent of natural gas output.
A lockout, which would have commenced at midnight on July 10th, threatened to stall production by Western Europe’s biggest crude exporter.
“The end of the strike in Norway and lower imports by China are weighing on oil prices today, while in the background the Europe crisis is unresolved,” Robert Montefusco, a senior broker at Sucden Financial Ltd. in London, said by e-mail. “Unless we get more stimulus from China, it looks like Brent will test $95 again.”
Norway’s Statoil ASA (NYSE: STO) stated that full production would be underway within a week.
Meanwhile, a Chinese government report indicated net crude imports having dropped to 5.28 million barrels a day in June.
That is the lowest number for the world’s second-biggest oil consumer since December’s imports of 5.1 million barrels.
Export growth, likewise, showed a decline—down to 11.3 percent from May’s 15.3 percent.
Iranian Foreign Minister Ali Akbar Salehi also announced yesterday that the nation would not shut down the Strait of Hormuz, which it had threatened to do in retaliation for worldwide sanctions due to Iran’s erratic nuclear program. The Strait carries almost a fifth of the world’s crude supplies, and this news also caused crude to drop.
Brent for August fell to $98.81 yesterday, while West Texas Intermediate hit $85.13.