LONDON: Oil prices jumped $2 to more than $102 a barrel on Thursday as Norway's state oil major Statoil said it would start shutting down production at its North Sea fields after its dispute with the unions over pensions hit a deadlock.
The company said the shortfall in production would amount to 1.2 million barrels per day of oil equivalent and reductions would begin from July 9 as some 6,500 workers will be locked out of their work places because of the conflict.
The dispute between the industry and the unions has so far reduced production from Norway, the world's eighth largest oil exporter, by around 13 percent.
The government of Norway has the right to intervene to enforce the settlement in the strategic oil industry and the lockout will most likely trigger such action.
Norway's labour ministry said the decision to call a lockout of all workers was legitimate but declined to comment on whether the government planned to intervene in the conflict.
"A lockout is still a part of the legal strike," said Gro Oerset, senior adviser at the Labour Ministry. "We are continuing to follow the situations closely."
Brent crude traded $1.83 up at $101.60 per barrel by 0951 GMT. US crude futures firmed by 55 cents to $88.21.
Later on Thursday, the European Central Bank is expected to further cut interest rates to support the flagging economy in the European Union.
All of Europe's biggest economies are in recession or heading there and show little sign of improvement soon, surveys showed on Wednesday, backing the view that the region's central bank is poised to ease policy.
The Bank of England may announce a third round of stimulus on Thursday after a raft of weak data.
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