Oil Prices Ease After Suez Canal Traffic Restarts

Channels Television  
Updated March 29, 2021
This picture taken on March 29, 2021 from a nearby tugboat in the Suez Canal shows a view of the Panama-flagged MV ‘Ever Given’ (operated by Taiwan-based Evergreen Marine) container ship as it begins to move. AFP


World oil prices eased on Monday as traffic resumed on the Suez Canal after a massive container ship blocking the waterway was freed.

The Suez Canal Authority said the Ever Given was back afloat and traffic resuming in one of the most important routes for global trade and crude shipments that had been shut for almost a week.

Crude prices had tumbled earlier after the ship was partially freed, but rebounded quickly afterwards when salvage experts said the hardest work was ahead.

But only hours later they managed to free the ship completely, and oil prices fell back.

Traders also mulled Thursday’s OPEC producers’ meeting.

– ‘Ripple effects’ –
Despite the resumption of traffic, analysts say that it will take time for container transport to resume to normal.

“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.”

A handout picture released by the Suez Canal Authority on March 25, 2021 shows Egyptian tug boats trying to free Taiwan-owned cargo MV Ever Given (Evergreen), a 400-metre- (1,300-foot-)long and 59-metre wide vessel, lodged sideways and impeding all traffic across the waterway of Egypt’s Suez Canal.  AFP / Suez CANAL


The Suez Canal Authority said the waterway would be open 24 hours per day and the backlog of hundreds of vessels could be cleared in around three and a half days.

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.

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London traded flat, while Paris and Frankfurt both rose 0.3 percent despite the continent’s stuttering inoculation drive and rising infections.

New York’s three main indices opened lower on Monday after having 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 1430 GMT –
West Texas Intermediate: DOWN 0.9 percent at $60.40 per barrel

Brent North Sea crude: DOWN 0.8 percent at $64.04 per barrel

London – FTSE 100: DOWN 0.5 percent at 6,709.61 points

Frankfurt – DAX 30: UP 0.3 percent at 14,793.23

Paris – CAC 40: UP 0.3 percent at 6,009.28

EURO STOXX 50: UP 0.3 percent at 3,878.33

New York – Dow: DOWN 0.3 percent at 32,971.76

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)

Euro/dollar: DOWN at $1.1787 from $1.1794 at 2200 GMT

Pound/dollar: UP at $1.3828 from $1.3789

Euro/pound: DOWN at 85.24 pence from 85.53 pence

Dollar/yen: UP at 109.67 yen from 109.64 yen