Oil prices rose on Tuesday as a looming strike in Norway threatened to cut output in western Europe’s biggest producer, although Britain’s vote to leave the European Union was still weighing on markets.
About 755 Norwegian workers on seven oil and gas fields could go on strike from Saturday, hitting output from the North Sea’s top producer, if a new wage deal is not agreed before a Friday deadline.
A final round of mandatory talks will be hosted by a state mediator on June 30 and July 1 in an effort to avoid disruption that could start the following day.
The affected fields account for nearly 18 percent of Norway’s oil output and a little more than 17 percent of its natural gas, Reuters calculations show.
Combined oil output was about 285,000 barrels per day in the first four months of the year, with natural gas output at 48.5 million cubic meters (mcm) per day.
London Brent crude futures were trading up around 1.5 percent, or 70 cents, at 0651 GMT at $47.86 per barrel.
U.S. West Texas Intermediate (WTI) futures were up 78 cents, or 1.68 percent, at $47.11 a barrel.
But the price rises came after oil fell to 7-week lows in the previous session on the back of market turmoil over Britain’s vote to leave the EU, reducing investor appetite for volatile commodities like oil.
“Crude oil led the sector lower as investors continued to dump risky assets,” ANZ bank said on Monday.
Consultancy Energy Aspects said Brent was “under pressure as timespreads continued to weaken amidst a complete collapse in bids for crude”.
It added that refinery run cuts in Asia, which use physical crude oil as their main feedstock and crude futures for hedging purposes, were also dragging on markets.
Markets were also weighed by news that a successful ceasefire in Nigeria had allowed repairs to oil pipelines that had restricted the country’s ability to export oil, ANZ Bank said.
Oil production in Nigeria has risen to about 1.9 million bpd from 1.6 million bpd due to repairs and more than a week having passed since a major pipeline attack in the Niger Delta, a state oil company spokesman said on Monday.