Oil Prices Slump as Kuwaiti Oil Workers Return to Work

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Oil prices declined on Wednesday after Kuwaiti workers ended their three-day strike, sparking fresh fears over global oversupply as the country’s production levels goes back up again.

New York crude oil for June delivery gave up 81 cents, or 1.91%, to trade lower at $41.62 a barrel by 0825 GMT.

Global benchmark Brent declined 86 cents or 1.95% to $43.18.

The nationwide oil workers strike in Kuwait reduced the country’s output to the global market by 1.3 million barrels a day, which helped prop up oil prices after major oil exporting countries failed to reach a consensus on an output freeze at the weekend meeting in Qatar.

Talks between major producers on Sunday broke down after Saudi Arabia demanded the participation of Iran. The latter has previously announced that it will not limit its output until exports reach pre-sanction levels.

Iran was banned from exporting oil after the U.S. and European Union imposed sanctions over the country’s nuclear program. The sanctions were lifted in January after Iran agreed to curb its nuclear activities.

Worries over global oversupply were renewed after data from industry group American Petroleum Institute (API) revealed that U.S. crude stocks increased higher than expected last week.

Numbers show that crude inventories grew by 3.1 million barrels in the week leading to April 15 to 539.5 million. Analysts were projecting an increase of only 1.6 million barrels.

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