WTI Crude Oil Starts the Week on a Slightly Weak Note
WTI crude oil is starting the fresh week on a slightly bearish note after experiencing significant volatility through the past week as worries about the impact of Europe’s fresh lockdowns on oil demand were offset by supply tightening due to a container ship blocking the Suez Canal. At the time of writing, WTI crude oil is trading at around $59.88 per barrel.
Last week, a container ship Ever Given ran aground in a narrow portion of the Suez Canal – an important route for international trade and supply, especially of crude oil. This resulted in blockages on both ends, preventing the movement of several hundreds of container ships, some carrying oil, raising concerns of possible tightening in supply of oil headed to refineries.
Even as operations are underway to rescue the ship and restore movement across the canal, crude oil prices strengthened by over 4% in trading on Friday. The sudden spike came after considerable uncertainty after several European countries reimposed lockdowns and restrictions to contain the third wave of the coronavirus pandemic, heightening concerns of a delay in recovery of the region’s economy and oil demand.
However, crude oil prices could receive some support from OPEC and its allies later this week if the leading oil producing nations decide to extend their deeper supply cuts at their upcoming meeting. At their last meeting, OPEC+ had decided to continue with higher supply restrictions into April and are scheduled to meet this week to decide on supply going forward.
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