Though Kuwait's government said it may take a few days for output to return to normal, the end of a labor strike there sent crude oil prices lower Wednesday.
Kuwaiti oil production dropped by as much as 60 percent after laborers declared a strike Sunday, giving crude oil prices a lift after major oil states wrapped up a weekend meeting in Doha with no firm agreement on how to stabilize the market. Though Kuwait is a minor contributor to the total share produced by members of the Organization of Petroleum Exporting Countries, the decline was on par with the total production from North Dakota, the No. 2 oil producer in the United States.
A government spokesman in Kuwait said emergency workers and volunteers had managed to recover some output after the strikes ended, though it make take about three days before production returns to around 3 million barrels per day.
Crude oil prices, which had rallied in response to the cut in Kuwaiti oil production, suffered heavy losses in early Wednesday trading. The price for Brent crude oil dropped 1.8 percent to $43.23 per barrel. West Texas Intermediate, the U.S. benchmark for the price of oil, was down 2.4 percent to $40.09 per barrel.
Oil prices were pressured further by data showing a decline in energy demand in China. Data from the Chinese National Bureau of Statistics said energy intensity, the amount of energy consumed per unit of gross domestic product, was down by as much as 10 percent in some provinces last year. On the whole, the data show China's energy intensity dropped 5.6 percent last year compared with the previous year.
China's economy is slowing from double-digit growth posted a few years ago. The Chinese Central Bank said Monday it was injecting another $25 billion into the financial system in an effort to help banks maintain liquidity.
Meanwhile, Russian Oil Minister Alexander Novak, an early advocate for a move to keep production steady, confirmed Wednesday there were talks of more potential market meetings among oil states. Deputy Energy Minister Alexei Teksler said, however, that Russian oil production would be slightly higher than 2015 levels, but would level off somewhat by 2017.
