Chevron California refinery workers strike; fuel prices are not affected by Reuters

By Erwin Seba and Gary McWilliams

(Reuters) -Picketers marching outside the gates of a major Chevron Corp (NYSE:) oil refinery outside San Francisco said Monday they could endure a lengthy strike to file claims for a new labor contract.

But the plant continued to operate normally and fuel supply and prices are not expected to be affected, gasoline analysts said.

More than 500 members of United Steelworkers at 245,000 barrels a day in Richmond, Calif., retired early Monday after members rejected a Chevron contract proposal over the weekend.

The strike is the first in more than 40 years at the plant, which is a major supplier of gasoline, jet fuel and diesel fuel. The last strike, in 1980, lasted five months, United Steelworkers union local 5 First Vice President BK White said.

“We’re waiting for Chevron to come to the table,” White said in an interview outside the gates as truck drivers honked their horns in support. The union is willing to “sit down until we have a fair and equitable contract,” he added.

NO IMPACT ON THE PUMP

California, which has some of the highest fuel prices in the nation, is unlikely to feel an impact, fuel analysts said. Wholesale California gasoline prices fell 21.5 cents and 13 cents per gallon, respectively, in the Los Angeles and San Francisco markets Monday, traders said.

According to motorists’ group AAA, a gallon of unleaded gasoline in the state sold on average for $5.86 Monday and a gallon of diesel for $6.26.

“A strike at a refinery is not necessarily a catastrophic event in terms of prices and supplies. Motorists, at least for now, are unlikely to notice anything,” said Patrick De Haan, head of petroleum analysis at GasBuddy.

Chevron continues to operate the facility and remains willing to enter into further discussions with the union, spokesman Tyler Kruzich said.

The company began on Sunday evening to replace union workers on the controls of production units with managers, technical personnel and others.

NO NEW CALL SET

There are no plans to resume contract talks.

“The strike potential puts people off, but in reality and in the short term it shouldn’t affect anything,” said a Los Angeles fuel merchant, who spoke on condition of anonymity to maintain business relationships.

“It’s different here in California, where strikers don’t get violent,” the trader said. “Refinery management must be able to serve the refinery at least as well as the union crews.”

Still, US gasoline futures in New York rose 4.5% after reports that European Union officials are considering a ban on Russian petroleum over the country’s invasion of Ukraine, said Devin Gladden, a spokesman for motorists’ group AAA.

The USW’s local factory union has asked for a 5% pay increase over the pay increase agreed last month under a national labor agreement because of the higher cost of living in the San Francisco Bay Area.

It also wants the company to add staff to reduce the 60-70 hours union members sometimes have to work, USW White told Reuters.