Oil Updates — Crude edges down; Norwegian oil firms, employees agree on wage deal; Sri Lanka open to buying Russian oil

RIYADH: Oil prices slid on Monday as a flare-up in COVID-19 cases in Beijing quelled hopes for a rapid pick-up in China’s fuel demand, while worries about global inflation and sluggish economic growth further depressed the market.

Brent crude futures fell $1.81, or 1.48 percent, to $120.20 a barrel by 0443 GMT while US West Texas Intermediate crude was at $118.81 a barrel, down $1.86, or 1.54 percent. Both contracts dropped over $2 earlier in the session.

Prices fell after Chinese officials warned on Sunday of a “ferocious” COVID-19 spread in the capital and announced plans to conduct mass testing in Beijing until Wednesday.

Norway oil firms, workers agree on wage deal

Norwegian oil firms and employees have agreed in principle on a new wage deal, avoiding, for now, a strike at nine fields that could have hit the country’s petroleum output, employers and unions said on Sunday.

Two of the three unions that negotiated with oil firms will seek approval from their members before they formally approve the deal, the lobby representing employers and two union leaders told Reuters.

“Agreement. No strike. But Lederne and Safe (trade unions) send the results to a referendum (of) their members,” a spokesman for the Norwegian oil and gas lobby said.

Some 845 workers out of about 7,500 employees on offshore platforms had planned strike action from June 12 if the annual pay negotiations with employers failed, trade unions Safe, Industri Energi and Lederne had said.

The largest of the three unions, Industri Energi, has agreed on a wage deal and will not seek approval from its members, it said in a statement.

The leader of the Safe union said it would seek the go-ahead of its members before approving the negotiated deal.

Sri Lanka open to buying Russian oil

 Sri Lanka may be compelled to buy more oil from Russia as the nation faces shortages amid an unprecedented economic crisis, its prime minister told the Associated Press.

Prime Minister Ranil Wickremesinghe, in an interview with the news agency on Saturday, said he would first look to other sources, but would be open to buying more crude from Moscow.

The country is in the midst of its worst financial crisis in seven decades and is severely strapped for dollars to pay for critical imports including food, fuel and medicine.

While Washington and its allies are trying to cut financial flows supporting Moscow’s war effort, Russia is offering its crude at a steep discount, making it extremely enticing to a number of countries.

(With input from Reuters)