Oil climbed as investors assessed the impact on global crude flows after a ship ran aground and blocked the Suez Canal, following a sell-off on Tuesday, reports Yahoo Finance.
Markets reprieve
Crude was also bolstered by positive economic data as Europe posted a record increase in factory output.
Futures in New York added as much as 3.4% after a ship ran aground, giving the market a reprieve after prices sank to the lowest level since early February.
For more information read our article Mega Boxship Blocks Suez Canal Traffic
Despite efforts to move the vessel, it could block the route for days, according to people familiar with the situation.
Pressure on OPEC+
Oil prices have sunk about 12% in less than two weeks amid softening physical demand and the unwinding of long positions.
The prompt timespread for Brent crude has also flipped into a bearish structure for the first time since January.
Oil’s recent plunge may put pressure on OPEC+ to do more to try and stem the slide, with the group meeting next week to decide on production policy for May.
Into oil again
Bjarne Schieldrop, chief commodities analyst at SEB AB said, “It’s all about the Suez, as well as people trying to get into oil again after the sell-off.”
“The situation is still murky in terms of lockdowns, mutations and vaccination rollout delays.”
Suez traffic blockage
The Suez Canal is frequently used by tankers transporting crude from the world’s top exporters in the Middle East to customers across Europe.
The 400-meter (1,300-foot) long container ship’s hull became wedged lengthways across the canal on Tuesday, causing a gridlock of at least 100 vessels.
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Source: Yahoo Finance
