Oil market rebounds on Suez ship warning

AFP: World oil prices rebounded yesterday, reversing earlier losses after a warning that the Suez Canal container ship blockage remains a challenging situation.

The head of a Dutch salvage firm helping refloat a huge container ship stuck in the Suez Canal warned that “the challenge is still ahead” despite some success in moving it as the bow remains stuck. Traders remain on tenterhooks because the canal is one of the most important routes for global trade and crude shipments.

“The good news is that the stern is free but in our view that was the easier part. The challenge is still ahead because you really have to slide the ship, with the weight it is carrying,” said Peter Berdowski, Chief Executive of Boskalis, the parent company of salvage firm Smit Salvage.

“The bow is still completely stuck... the real challenge, of course is to actually slide the ship away,” he told NPO Dutch public radio. In reaction, oil prices were about one percent higher in midday London deals, as traders also mulled Thursday’s OPEC producers’ meeting.

Prices tumbled earlier after salvage teams were said to have managed to partly move the ship which has blocked the Suez Canal for almost a week.

“The market will soon realise that... even if Ever Given leaves the canal within days, some leftover downstream ripple effects should be expected,” warned Rystad Energy analyst Louise Dickson.

“Oil loadings, as well as some oil demand could be affected as manufacturers may have to close or pause production as they wait for delayed goods to arrive at plants.”