Crude Oil set for weekly loss in wild week with Suez ship still stuck

Crude Oil Futures in New York edged higher Friday but are still down more than 4% this week after U.S. coronavirus cases started to rise again and some European countries renewed lockdowns in a setback for the recovery.

Crude Oil Futures set for weekly loss

Oil was poised for a third weekly decline amid near-term demand concerns after a volatile few days that saw prices swing wildly around $60 a barrel, while a massive container ship remains stuck in the Suez Canal.

Futures in New York edged higher Friday but are still down more than 4% this week after U.S. coronavirus cases started to rise again and some European countries renewed lockdowns in a setback for the recovery. Volatility in the oil market has climbed to the highest since November and the prompt time spread for global Brent crude flipped briefly into a bearish structure on Tuesday.

A super dredger is a new tool being used to try and dislodge the ship in the Suez Canal, which is a key artery for crude and oil product flows. The blockage has led to rising shipping rates and the gridlock of vessels waiting to pass.

Despite the weekly loss, oil is still up more than 20% this year and there is confidence in the longer-term outlook as vaccination rates accelerate and OPEC+ keeps supply in check. The group meets next week to decide on its production policy for May in a meeting that will be keenly watched.

Brent’s prompt time spread was 15 cents a barrel in backwardation — a bullish structure where near-dated contracts are more expensive than later-dated ones — on Thursday. That compares with 67 cents at the start of the month.

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