On Friday, both US and UK crude oil futures’ prices had pared almost all of their steep losses stomached on previous session as market participants remained fretted that the global supplies of oil, both crude and refined, might be disrupted for weeks after a 400-metre mammothlike Taiwanese container ship, Ever Given, had occluded passages in a single-lane southern stretch of Suez Canal on Tuesday, sharpening up prospects of a potential supply-crunch as salvage ship owners were vying to vent out a way to dislodge the giant container ship.
In point of fact, in the day’s sharp gains in crude oil futures’ prices were largely seen as a bounce back from previous session’s sharp depreciations, which seemingly had stemmed off fresh concerns that a third wave of pandemic outbreak prodding stiffer lockdown measures in major European economies would hurt demand outlook.
Nonetheless, the latest occlusion in Suez Canal that channels about 1.74 million bpd of crude oil out of 39.2 million bpd of seaborne crude alongside another 1.54 million bpd of refined oil alongside other crude derivatives, roughly a 9 per cent of entire global seaborne oil products combined, had overshadowed concerns of a sweeping demand-plunge in a near term outlook.
Crude oil rises as Suez Canal blockage may last for weeks
Apart from that, one of the salvage ship owners were quoted saying later this week that it would take at least until Wednesday to dislodge the giant container ship, however, had also added that the process might take several weeks as a raft of tug ships were failing to engage properly due to a harsh weather including gusts of severe sandstorms.
Amid such cataclysmic outlook, industry sources were quoted saying that several cargo ships were mulling a potential option to bypass Suez Canal and set sail through a much-longer route in the South Atlantic, though such moves would step up expenses by a substantial scale and take at least an additional a week and a half to reach their destinations.
Citing statistics, in context of such chaotic narratives in global supply chain, UK crude futures gained as much as 4.2 per cent to $64.57 a barrel on Friday, while US West Texas Intermediate (WTI) crude oil futures leapfrogged 4.1 per cent to settle down at $60.97 a barrel.
On the week, UK crude contracts edged 0.1 per cent higher, while US WTI crude futures tumbled 0.7 per cent, marking up its third straight weekly percentage decline in a row. Meanwhile, addressing to the tempestuous supply chain disruptions, Vice President of Rystad Energy’s oil market, Rodriguez Masiu said in the day’s commodity market wind down, “Today the market is up again as traders in a change of heart decided that the Suez Canal blockade is actually becoming more significant for oil flows and supply deliveries than they previously concluded”