This is HUGE news for oil prices

[dan_s]

Reports from leaders of the Brazilian oil workers union say the recent strike by the union has resulted in a decrease in oil production of about 500,000 barrels per day. This is potentially impactful, because, for context, the recent IEA estimate of the amount that the oil markets are over-supplied by is 900,000 barrels of oil per day in 4Q 2015. Full story from Resters below. KEEP IN MIND THAT U.S. OIL PRODUCTION IS ALSO ON TRACK TO FALL BY 400,000 BARRELS PER DAY IN Q4 AND KEEP FALLING.


RIO DE JANEIRO/SAO PAULO, Nov 3 (Reuters) - A strike that began on Sunday at Brazil's state-run oil producer Petroleo Brasileiro SA has slowed daily oil output by around 25 percent, the country's largest union FUP said on Tuesday.

FUP's general coordinator José Maria Rangel said in a video published online that in the first 24 hours since the union's members joined the strike, they had prevented around 450,000 barrels of oil from being extracted in the offshore Campos Basin, and nationwide around 500,000 barrels.

Petrobras, as the company is known, produced around 2 million barrels of oil per day in September.

News of the strike in the ninth biggest global producer helped push oil prices back up towards $50 per barrel on Tuesday. The production hit comes as Petrobras is particularly strapped for cash, amid the country's largest-ever corruption scandal and low oil prices. [nL3N12Y1GS]

The lost oil production could cost Petrobras some $25 million per day in foregone revenue, analysts said.

"It's at least that," said David Zylbersztajn, director of local consultancy DZ Negocios com Energia.

Brazil's ANP oil agency said in a statement there was no risk of oil shortages at the moment due to the strike.

Petrobras said in a statement late on Monday it was evaluating impact and had enacted contingency teams in some units. The company said it was taking all necessary measures to continue supplying the market. Petrobras did not respond to request for information on the strike on Tuesday.

FUP, which represents platform, refinery and other workers, on Sunday afternoon joined a number of smaller unions already in an open-ended strike. The unions are protesting attempts by the government to shrink Petrobras, which is struggling with heavy debts, a corruption crisis and falling oil prices.

Forty-four different production units are participating in the strike in the offshore Campos Basin, unions said. They said workers at refineries in Sao Paulo and Bahia were also participating.