Oil Edges Lower As Salvage Operation in Canal Goes On

Oil
A view shows Ever Given container ship in Suez Canal in this Maxar Technologies satellite image taken on March 28, 2021. Maxar Technologies/Handout via REUTERS

TOKYO ⸺ Oil was slightly lower on Monday, relatively placid after four sessions of wild swings in price, as efforts continued to dig out the giant container ship clogging the Suez Canal and little new emerged in the demand picture.

Brent oil was down 18 cents, or 0.3%, at $64.39 a barrel by 0141 GMT. U.S. crude fell 22 cents, or 0.4%, to $60.75 a barrel.

Both benchmarks are roughly where they were before the Ever Given became a household name after the container ship got stuck in a narrow portion of the canal last week. 

Hundreds of other container ships, bulk carriers and oil-laden tankers are backed up at both ends of the canal as salvage teams intensified excavation and dredging to refloat the 400-metre (440-yard) ship. 

“Each day that passes increases the oil on water rather than in the refinery for processing,” said Stephen Innes, chief markets strategist at axi. That “should help to re-tighten the physical market and stabilize prices.”

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Oil prices rose more than 4% on Friday, capping a week of wild swings as traders and investors tried to weigh the impact of the blockage of a key trade transit point and the broader effect of lockdowns to stop coronavirus infections.

Prices are getting some support from expectations that the Organization of the Petroleum Exporting Countries and its allies will maintain lower output levels when they meet this week.

Reporting by Aaron Sheldrick. Editing by Gerry Doyle; Reuters

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