Oil futures rose Wednesday, partially recovering from a rout in the previous session after a container ship ran aground in the Suez Canal, blocking traffic through the crucial waterway.
About 10 of global seaborne oil passes through the canal. This should be fixed pretty quickly though so I doubt if it will have much lasting impact, said Marshall Gittler, head of investment research at BDSwiss Holding, in a note.
West Texas Intermediate crude for May delivery rose 1.21, or 2.1, to 58.97 a barrel on the New York Mercantiel Exchange. May Brent crude, the global benchmark, rose 1.16, or 1.9, to 61.95 a barrel on ICE Futures Europe.
The bounce comes after sharp losses on Tuesday amid worries over rising European COVID cases and extended lockdowns on the continent stoked worries over the demand outlook. Crude fell into correction territory Tuesday, defined as a fall of 10 from a recent peak.
Traffic in the Suez Canal, a narrow waterway that divides continental Africa from the Sinai Peninsula, came to a halt Tuesday after the MV Ever Given, a Panamaflagged conatiner ship with an owner listed in Japan, ran aground.
The transportrelated bounce aside, analysts said recent weakness in oil futures appeared to catch up with softness in the physical market.
Brent crude had moved into contango, in which nearby futures traded at a discount to laterdated contracts, a signal of weak demand and in incentive to put crude in storage.
At the same time, speculative liquidation would…