Largest Strike by US oil workers enters second day

Largest Strike by US oil workers enters second day

A strike, largest since 1980 launched by oil workers at nine refineries entered a second day Monday.

The strike, which begun on Saturday has impacted plants that together account for more than 10% of US refining capacity.

The United Steelworkers (USW) union that represents employees at more than 200 refineries, terminals, pipelines and chemical plants stopped work Sunday after failing to agree on a renewed labor contract major oil companies.

The union has been renegotiating a three-year national contract since 21 January. A latest offer, which was the fifth proposal made by Royal Dutch Shell Plc on behalf of companies including Exxon Mobil Corp. and Chevron Corp was rejected by the union.

Although, only one of the nine plants has curbed production in the middle of the stoppage, a full walkout of USW workers could disturb 64% of US fuel output.

David Lennox, a resource analyst at Fat Prophets in Sydney, said, “If the strike escalates, that would be detrimental to the oil price. It will put high US production out on the market and there is nowhere for it to go”.

In an interview in Pittsburgh in October, Gary Beevers, the USW international vice president who manages the union’s oil sector said that the USW asked employers for substantial pay increases, stronger rules to stop fatigue and measures to keep union workers rather than contract employees on the job.

US benchmark West Texas Intermediate oil fell as much as $1.57 a barrel, or 3.3%, to $46.67 in electronic trading on the New York Mercantile Exchange. It jumped 8.3% on Friday, the biggest one-day advance since June 2012.

Gasoline for March delivery slid 2.33 cents a gallon, or 1.6%, to $1.4555, and the diesel contract for the same month was 1.89 cents lower at $1.6819.

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