Prices, however, were still headed for a third consecutive weekly loss. Brent Crude settled 4.23% higher at $64.57 per barrel, after dropping 3.8% on Thursday. WTI Crude advanced 4.12% to settle at $60.97 per barrel, having tumbled 4.3% a day earlier. Both benchmarks were on track for a weekly loss of more than 3%, following a more than 6% decline last week.
The trapped container ship is blocking traffic in the Suez Canal, one of the world’s busiest shipping channels for oil and refined fuels, grain and other trade between Asia and Europe. Officials stopped all ships entering the canal on Thursday, and a salvage company said the vessel may take weeks to free. “Expectations that the blockage of the Suez Canal may last for weeks raised fears of supply tightness in oil markets,” said Nissan Securities researcher Yasushi Osada.
“But lingering worries that a fresh wave of lock downs in Europe and elsewhere may slow a recovery of global fuel demand are expected to limit price gains,” he said. Countries in Europe are renewing restrictions to curb the spread of COVID-19, which will likely reduce fuel demand from the region. Germany, Europe’s largest economy, has seen its biggest increase in coronavirus cases since January. In parts of western India, authorities ordered people indoors as new infections hit the highest level in five months.
The oil market was also under pressure as producers had difficulty selling to Asia, especially China. Asian buyers instead took cheaper oil from storage while refinery maintenance has reduced demand, industry sources said.
