Oil prices will rise 2% for fear of a Suez blockade last week

TOKYO (Reuters) – Back prices stop sharp sales a day earlier to rise around 2% on Friday amid fears it could take weeks for a large cargo ship to launch. the Suez Canal blockade, which eliminated raw materials and refurbished goods.

But prices remained flat for a third consecutive weekly loss, with demand forecasts declined by new coronavirus locks in Europe.

Brent crude was higher by $ 1.09, or 1.8%, at $ 63.04 a barrel before 0750 GMT, after falling 3.8% Thursday.

The U.S. West Texas Intermediate (WTI) crude went up

$ 1.22, or 2.1%, at $ 59.78 a barrel, after falling 4.3% a day earlier.

Both criteria were on track for a small weekly loss, following a decline of more than 6% last week.

The locked vessel is stopping traffic in the Suez Canal, one of the world’s busiest shipping channels for regenerated oil and fuel, grain and other trade between Asia and Europe.

Officials stopped all boats that came into the canal Thursday, and a rescue company said the vessel may take weeks off.

“Fears of a tightening of supply grew as the main Suez interrupted the big ship, overcoming concerns about weak demand due to locks in Europe and Asia,” said Satoru Yoshida, a goods analyst. and Rakuten Securities.

Of the 39.2 million barrels per day (bpd) of total marine trade in crude in 2020, 1.74 million bpd passed through the Suez Canal, according to tanker tracking company Kpler. In addition, 1.54 million bpd of refined oil products such as gasoline and diesel fuel flow through the waterway, about 9% of global marine product trade, Kpler said.

Entering the blockade in the Suez Canal, shipping levels for oil production tankers have almost doubled this week, and several vessels were diverted from the canal as a cargo ship was critical. large still separated between the two banks.

Oil markets have also been raised by concerns about reducing geopolitical risk in the Middle East. Houthi forces Yemen on Friday said it had launched attacks earlier a day on Saudi Arabia targeting facilities owned by Saudi state-owned oil company Aramco and weapons sites.

The Organization of the Petroleum Exporting Countries and its allies, known as OPEC +, were expected to maintain lower production as well as support prices, said Nissan Securities researcher Yasushi Osada.

The delegation is expected to meet on April 1 to decide on May supplies, and OPEC + sources told Reuters that they expected the delegation to adhere to the highest standards. The current low demand, as the forecast for demand has declined due to new locks in Europe.

In action a week ahead of the OPEC + meeting, Abu Dhabi National Oil Company (ADNOC) has deepened crude oil supply cuts for Asian customers in June to 10% -15% from 5% -15% in May, several sources with experience of the case said Thursday.

Reporting by Yuka Obayashi; Edited by Christopher Cushing, Simon Cameron-Moore and Philippa Fletcher

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