Sign Up for FREE Daily Energy News
CDN NEWS  |   US NEWS  | TIMELY. FOCUSED. REVELANT. FREE
  • Stay Connected
  • linkedin
  • twitter
  • facebook
  • youtube2
BREAKING NEWS:

Ranger Inspection
Hazloc Heaters
Hazloc Heaters
Ranger Inspection

Oil Gains With Broader Markets While Suez Impact Limited


(Bloomberg)

Oil resumed gains, mirroring sentiment in broader markets, after a volatile few days that that saw prices swing wildly around $60 a barrel.Futures in New York climbed 2.2% with a gauge of market volatility at its highest since November. The Suez Canal blockage is rumbling on, but its impact on headline prices has been muted. Still, shipping rates have climbed and a gridlock of vessels are waiting to pass through the vital artery, with efforts to dislodge the Ever Given expected to take until at least Wednesday.

Oil’s gains on Friday came amid a rise in broader markets and a weaker dollar, aided by optimism around Covid-19 vaccine distribution. Still, U.S. virus cases are rising again and some European countries renewed lockdowns in a setback for the global recovery.

Oil heading for third weekly drop on demand concerns

The impact on the oil market from the blockage is likely to be muted, with crude flows from the Middle East to Europe declining due to a long-term realignment of trade. While plenty of oil is shipped from the North Sea to Asia, it’s usually carried on tankers that are too large to pass through the canal.

There are also ample oil-product supplies across the region, with inventories at the major hub of Singapore holding near the five-year average. None of that has stopped crude from undergoing wild swings so far this week, though.

“The last days feel like oil investors are on a roller coaster,” said Giovanni Staunovo, commodity analyst at UBS Group AG. “Drops are followed by a rise the day after, with fundamental news not being able to explain those shifts.”

Prices
  • West Texas Intermediate rose $1.26 to $59.82 a barrel at 10:56 a.m. London time
    • It is down 2.6% this week.
  • Brent for May settlement gained 2% to $63.16

Volatility in the oil market has climbed recently to the highest since November and the prompt timespread for global Brent crude flipped briefly into a bearish contango on Tuesday. It’s now back in a bullish backwardation structure — where near-dated contracts are more expensive than later-dated ones.

Oil has sold off in recent weeks amid softening physical demand, a stronger dollar and the unwinding of long positions. Despite the recent declines, prices are still up more than 20% this year and there is confidence in the longer term outlook as vaccination rates climb and OPEC+ keeps supply in check. The group meets next week to decide on its production policy for May.

“The turbulence of oil prices is making trading unpredictable,” said Paola Rodriguez Masiu, Vice President of Oil Markets at Rystad Energy. “Market participants are at a crossroad, trying to pick what’s more significant, bullish transport disruptions or bearish European lockdowns.”

Other oil-market news:
  • A backlog of pre-drilled shale wells is rapidly shrinking as oil prices rise, signaling that producers are ready to put drilling crews back to work.
  • Kuwait Petroleum Corp. plans to borrow as much as $20 billion over the next five years to make up for an expected shortfall in funding, needed to maintain its crude-production levels.
  • A fire broke out at a storage tank inside a Saudi petroleum distribution station in the city of Jazan after a Houthi rebel projectile hit the station, state-run SPA reported.


Share This:



More News Articles


New SHOWCASE Directory Companies

 

RAM Industries Inc.
Becht
Osperity
RHK Hydraulic Cylinder Services Inc.