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USW Strike Causes Increase in Oil Barrel Prices

Many American’s have enjoyed the declining gas prices being almost cut in half over the past several months, thanks in part to OPEC’s refusal to cut production despite the demand for the product being reduced. However, the United Steel Workers union obviously has a different plan than the oil companies they work for as they have walked out on strike. Workers claimed poor health and safety conditions, too low of wages, and a poor attitude towards the communities that serve as homes to the refineries as the reasons behind their dispute. Meanwhile attempts of the companies to engage the unions who organized the strike have been unsuccessful signifying that the workers are looking to make the loss of production hurt the companies.

What is significant is that this strike is not the first since oil production began. It is however, the largest strike since 1980 when the world was attempting to overcome the oil embargo caused by a crisis with Iran and the overthrow of the Shah. But just as back then, the loss of production has made the price increase and it is not the company who will suffer for the loss of production but the consumer at the pump. By losing 10% of the US oil refining capacity it has made oil rise by a little over $2 per barrel. Lee Slaughter agrees that at first this may not seem significant, but the longer this strike continues the higher the costs will go up and therefore will make prices at the pump go up as well.

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