OIL JUMPS ON SUPPLY FEARS

OIL PRICES rose more than 3 percent on Friday, rebounding on concerns it could take weeks to dislodge a giant container ship blocking the Suez Canal, which would squeeze supplies of crude and refined products.

Prices, however, still recorded their third consecutive weekly loss, with the outlook for demand dented by fresh coronavirus lockdowns in Europe.

Brent crude was up $2.12 (about R31.73), or 3.4 percent, to $64.07 a barrel in late Friday afternoon trade, after dropping 3.8 percent on Thursday.

US West Texas Intermediate (WTI) crude was up $2.16, or 3.7 percent, at $60.72 a barrel, having lost 4.3 percent a day earlier.

Both benchmarks recorded weekly losses, following a more than 6 percent decline last week.

Egypt’s Suez Canal Authority said on Friday operations to free the stranded container ship would resume after completing dredging operations, which were 87 percent complete.

The salvage company said on Thursday dislodging the ship could take weeks.

Of the 39.2 million barrels per day (bpd) of total seaborne crude in 2020, 1.74 million bpd went through the Suez Canal, according to data intelligence firm Kpler.

Additionally, 1.54 million bpd of refined oil products flow through the canal, about 9 percent of global seaborne oil product trade, Kpler said.

On Friday, there were 10 vessels waiting at the entry points of the Canal carrying around 10 million barrels of oil, Kpler said.

Reeling from the blockage in the Suez Canal, shipping rates for oil product tankers have nearly doubled this week, and several vessels were diverted.

The oil markets were also lifted by worries over escalating geopolitical risk in the Middle East.

Yemen’s Houthi forces on Friday said they launched attacks on facilities owned by Saudi Aramco.