Little sign of progress after contact to end U.S. refinery strike resumes

By Erwin Seba

HOUSTON (Reuters) - A strike by U.S. refinery workers entered a third day on Tuesday as contact resumed between the lead industry negotiator, Royal Dutch Shell Plc (RDSa.L), and union leaders over a new nationwide wage deal.

After leaving the negotiating table early on Sunday when talks broke down, prompting labour leaders to call a strike, Shell late on Monday said it reopened communication with the United Steelworkers union (USW).

Asked about the status of the contact on Tuesday, Shell spokesman Ray Fisher said: "The USW and Shell continue to dialogue."

But the conversations do not appear very deep.

"No meetings have been scheduled as of now," said Lynne Hancock, USW spokeswoman. She said both sides met late on Monday but no progress was made.

Talks broke down on Sunday with workers asking for higher wages against a backdrop of crude prices that have plunged nearly 60 percent since June, prompting oil companies to cut spending.

Walkouts have been called at nine plants, including seven refineries, with a combined 10 percent of U.S. refining capacity. The strikes were the first since 1980 in support of a nationwide pact that would cover 63 refineries and 30,000 workers.

The USW has said further walkouts may be ordered if talks remain at a standstill.

Most affected refineries are running almost as usual, with operators having called on trained managers, retirees and operators from non-union plants to replace workers.

But one plant, Tesoro Corp's (TSO.N) 166,000 barrel-per-day Martinez, California, refinery, was being fully shut down as part of it was already in the middle of maintenance work, the company has said.

While refiners are promising little or no disruption to production, wholesalers and other buyers have snapped up supplies.

Traders have said the strike contributed to higher prices for gasoline futures (RBc1), which were up a percent at $1.5615 a gallon on Tuesday.

While refinery outages can reduce their purchases of crude, U.S. oil prices (CLc1) rose in early trade as new manufacturing data pointed to higher demand in the coming months.

The USW said Shell halted negotiations early Sunday after the union rejected a fifth proposal from the company.

Shell has repeatedly declined to comment on the details and content of the talks.

The union is seeking annual pay increases of 6 percent, double the size of those in the last agreement. It also wants work that has been given in the past to non-union contractors to start going to USW members, a tighter policy to prevent workplace fatigue and reductions in members' out-of-pocket payments for healthcare.

(Writing by Terry Wade; Editing by Alden Bentley, Bernard Orr)