Crude oil futures rebounded strongly on Wednesday after a ship that got struck in Suez Canal raised concerns about possible supply disruptions.

The MV Ever Given, a Panama-flagged container ship that carries trade between Asia and Europe, became grounded Tuesday in the narrow, man-made waterway dividing continental Africa from the Sinai Peninsula, threatening to disrupt a global shipping system already strained by the coronavirus pandemic.

West Texas Intermediate Crude oil futures for May ended up $3.42 or about 5.9% at $61.18 a barrel, after sliding 6.2% in the previous session.

Though prices have rebounded today, concerns about outlook for energy demand still persist due to reports about spikes in coronavirus cases and extension of lockdown measures in several countries across Europe.

Germany, France and Italy have expanded virus-related curbs amid a third wave of infections. The head of the World Health Organization said recent increases in deaths and cases represent “truly worrying trends.”

Data released by the Energy Information Administration (EIA) this morning showed U.S. crude inventories increased by 1.9 million barrels in the week ended March 19, against an expected drop of 900,000 barrels.

Gasoline stockpiles were up by about 200,000 barrels last week, while distillate stockpiles rose 3.8 million barrels.

The American Petroleum Institute (API) on Tuesday reported an increase in crude oil inventories of 2.9 million barrels for the week to March 19, against analysts’ expectations for a decline of about 300,000 barrels.

The material has been provided by InstaForex Company – www.instaforex.com

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