Brent increases as a strike in Norway threatens to hamper oil and gas production

5 Jul 2022 , 10:46 AM

Following a 2.4% gain on Monday, Brent crude futures increased by 82 cents, or 0.7%, to $114.32 a barrel.

U.S. West Texas Intermediate crude increased $2.58, or 2.4%, from Friday’s closing to $111.01 a barrel. Due to the U.S. vacation on July 4, there was no WTI settlement on Monday.

Norwegian offshore workers started a walkout on Tuesday that will lower the amount of oil and gas produced, the union in charge of the industrial action told Reuters.

According to Equinor, the strike is anticipated to cut oil and gas production by 89,000 barrels of oil equivalent per day (boepd), of which gas production accounts for 27,500 boepd.

According to the lobby, the oil output will be reduced starting on Wednesday by 130,000 barrels per day, or about 6.5% of Norway’s production.
Amid a general tightening in global financial conditions as the U.S. Federal Reserve battles runaway inflation with swift rate rises, the outlook for demand is also at the top of investors’ concerns.

As governments work to cool off the raging inflation, interest rates are also expected to rise in Australia and South Korea. Inflation in South Korea reached a nearly 24-year high in June, raising worries about slowing economic development and the price of crude oil.