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Markets

Oil market rebounds on Suez ship warning

  • Traders remain on tenterhooks because the canal is one of the most important routes for global trade and crude shipments.
29 Mar, 2021

LONDON: World oil prices rebounded Monday, reversing earlier losses after a warning that the Suez Canal container ship blockage remains a challenging situation.

The head of a Dutch salvage firm helping refloat a huge container ship stuck in the Suez Canal warned that "the challenge is still ahead" despite some success in moving it as the bow remains stuck.

Traders remain on tenterhooks because the canal is one of the most important routes for global trade and crude shipments.

"The good news is that the stern is free but in our view that was the easier part. The challenge is still ahead because you really have to slide the ship, with the weight it is carrying," said Peter Berdowski, chief executive of Boskalis, the parent company of salvage firm Smit Salvage.

"The bow is still completely stuck... the real challenge, of course is to actually slide the ship away," he told NPO Dutch public radio.

In reaction, oil prices were about one percent higher in midday London deals, as traders also mulled Thursday's OPEC producers' meeting.

Prices tumbled earlier after salvage teams were said to have managed to partly move the ship which has blocked the Suez Canal for almost a week.

"The market will soon realise that... even if Ever Given leaves the canal within days, some leftover downstream ripple effects should be expected," warned Rystad Energy analyst Louise Dickson.

"Oil loadings, as well as some oil demand could be affected as manufacturers may have to close or pause production as they wait for delayed goods to arrive at plants."

Elsewhere, Asian and European stock markets were mixed on Monday as traders mulled coronavirus turmoil and set aside another record-breaking pre-weekend lead from Wall Street.

London traded flat, while Paris and Frankfurt both rose 0.5 percent despite the continent's stuttering inoculation drive and rising infections.

New York's three main indices finished Friday on a strong note, with the Dow and S&P 500 ending at all-time highs.

A below forecast reading on US prices on Friday eased fears that inflationary pressures could force central banks to wind back their ultra-loose monetary policies and hike interest rates.

The week ahead will provide plenty for traders to get their teeth into including the release of key US jobs data for March and figures on manufacturing activity around the world.

Key figures around 1100 GMT -

West Texas Intermediate: UP 0.9 percent at $61.51 per barrel

Brent North Sea crude: UP 1.0 percent at $65.24 per barrel

London - FTSE 100: FLAT at 6,739.14 points

Frankfurt - DAX 30: UP 0.5 percent at 14,819.15

Paris - CAC 40: UP 0.5 percent at 6,015.80

EURO STOXX 50: UP 0.5 percent at 3,884.92

Tokyo - Nikkei 225: UP 0.7 percent at 29,384.52 (close)

Hong Kong - Hang Seng: FLAT at 28,338.30 (close)

Shanghai - Composite: UP 0.5 percent at 3,435.30 (close)

New York - Dow: UP 1.4 percent at 33,072.88 (close Friday)

Euro/dollar: DOWN at $1.1772 from $1.1794 at 2200 GMT

Pound/dollar: UP at $1.3828 from $1.3789

Euro/pound: DOWN at 85.12 pence from 85.53 pence

Dollar/yen: DOWN at 109.56 yen from 109.64 yen

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