Oil down as Suez Canal re-opens after six-day blockade

Oil down as Suez Canal re-opens after six-day blockade
Date: 29.3.2021 11:00

Oil prices fell on Monday following the refloating of the cargo ship that had blocked the Suez Canal, which impeded all waterway traffic for six days.

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International benchmark Brent crude was trading at $63.22 per barrel at 0700 GMT for a 1.87% decrease after closing Friday at $64.43 a barrel.
 
American benchmark West Texas Intermediate (WTI) was at $59.62 per barrel at the same time for a 2.21% drop after it ended the previous session at $60.97 a barrel.
 
A 400-meter-long container ship, the Ever Given, ran aground across a single-lane stretch of the canal last week, halting transit in both directions on one of the world's largest seaborne trade chokepoints.
 
However, after the six-day blockage, the vessel was successfully refloated early Monday, and when the disrupted supply chain normalized, prices were negatively affected.
 
In a tight market, any supply disruption would normally push prices upward, however, at a time when the markets are struggling with a supply glut due to pandemic-induced weak demand, the opening of the canal reflected negatively on prices.
 
Further price declines were limited on investor hopes that major oil producers will be cautious about placing more barrels on the market due to lingering uncertainties about a demand recovery with more restrictions and lockdowns in Europe likely with the rise in coronavirus cases.
 
OPEC+ is scheduled to meet on April 1 to consider their output cuts after April.
 
On March 4, OPEC+ rolled over existing production quotas until April, excluding Kazakhstan and Russia, which were allowed marginal production increases. Saudi Arabia also decided to keep its voluntary cuts.

YEREL HABERLER

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