French strikes continue to block refinery shipments and LNG terminals
PARIS, March 20 (Reuters) - Shipments of refined products from French refinery and depots were blocked on Monday by a 13th day of strike action, though some refineries operated with a reduced flow.
The industrial action is part of a nationwide movement against pension system changes that lift the retirement age two years to 64. The changes were forced through parliament without a vote last week.
There is an increasing expectation of diesel supply shortages in France and Europe as a result of the strike-caused outages, which are weighing on North Sea and Nigerian crude prices and lifting the spot price of diesel higher than the forward price, traders said.
"We expect product shortages by April (in France)," one trader said. "The diesel market flipped from feeling long and heavy to short and very backward," another trader said.
There are no signs of increased export from the Middle East currently on the water to plug the supply gap, but there is expectation for more U.S. supplies as more Russian supplies go to Latin America.
Long-range tankers (LR2s) are unable to enter French ports currently due to the strike, restricting diesel imports, traders said.
The cost of keeping LR2 vessels floating outside ports is leading many traders to avoid shipments into France, traders said.
Production at TotalEnergies' (TTEF.PA) 240,000 barrel per day (bpd) Normandy refinery and its 119,000 bpd site at Feyzin was reduced on Monday because deliveries were blocked. Deliveries were also blocked at the company's Donges and La Mede refineries, though production at both has been halted for maintenance.
Some refining units were operating normally at the Normandy site, a company spokesperson said.
The spokesperson added that the company will not give exact figures for how much production has been disrupted.
A trader told Reuters the refinery is expected to be fully shut within one or two days because of a backlog of refined stock.
Strikes also continued through the weekend and into Monday at ExxonMobil (XOM.N) subsidiary Esso's Fos refinery, blocking deliveries, CGT union representative Germinal Lancelin said.
The union is waiting to hear results of votes of no confidence in the government before deciding on continuation of the strikes, Lancelin added.
President Emmanuel Macron's government faces two motions of no confidence in the National Assembly on Monday after it bypassed the lower house to push through the deeply unpopular overhaul of the pension system.
At French liquefied natural gas (LNG) terminals, the strike was extended until March 27 at the three terminals operated by Engie (ENGIE.PA) subsidiary Elengy, a union representative said.
Workers at the Dunkirk LNG terminal in northern France voted late on Monday not to resume strike action after the site returned to operation on Friday following a strike, the union representative said. Another vote will be held later this week, possibly on Wednesday, on whether to take further strike action, the representative added.
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