Blockades of depots and strikes by refinery workers have resulted in shortages, with about a third of filling stations running dry on Tuesday, according to an Agence France-Presse report. Rail service and flights have also been disrupted.
But observers said disturbances are likely to fade after Tuesday’s widespread demonstrations, the latest in a prolonged series of strikes and protests. Tuesday’s action was the sixth day of nationwide protests in two months.
“The strike is losing momentum in the transport sector,” said Laurence Boone, economist at Barclays Capital, in a research note. “Paris pubic transport is running almost normally, international trains are running normally and about 50% to 70% of flights are maintained.”
The government has started to tap strategic oil reserves, which hold around three months of supply, and has begun reopening some refineries, Boone said. Also, college students will go on midterm vacations at the end of the week, which will likely curb their participation in any protests.
Meanwhile, the French Senate is expected to vote this week on President Nicolas Sarkozy’s proposal to raise the retirement age, to 62 from 60, while increasing to 67 from 65 the age at which retirees can claim full benefits.
The changes are needed to close a growing gap in the country’s state-run pension funds, Sarkozy has said.
“The biggest problem would be if I failed to do my duty, to make sure that we can pay for today’s and tomorrow’s pensions,” Sarkozy told journalists Tuesday, The Wall Street Journal reported.
“While positions have hardened on both sides ... the strikes which have crippled the French downstream oil sector are not likely to go on for an extended duration, and will probably be resolved by next week,” said Greg Priddy, global oil analyst at Eurasia Group in New York.
Union leaders are divided over what to do after the bill is voted on in the Senate, which is seen as virtually certain to approve the measure, the Financial Times reported.
Some unions see little point in extending protests beyond the Senate vote out of concern that further disruptions will turn the public against the protests.
But a poll by BVA published Wednesday found 59% of the French public backed a continuation of the strike even if the Senate passes the pension measure, AFP reported.
The strikes, shuttering all 11 of France’s refineries, have had a modest but contained impact on European petroleum-product markets, analysts said.
“France sources a third (around 445,000 barrels a day) of its crude imports from the FSU [former Soviet Union], but the impact of the loss of French demand on differentials for Urals and CPC blend should not be overestimated,” wrote analysts at JBC Energy in Vienna.
Both grades have weakened but remain within the band seen over the past year, they said.
William L. Watts is a reporter for MarketWatch in London.
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