Monday 29 March 2021 8:41 pm

Oil prices rise as as output cut hopes offset Suez Canal reopening

Oil prices rose nearly one per cent today as hopes that Opec+ will hold output cuts reversed an earlier slump linked to the reopening of the Suez Canal.

Futures had dropped earlier today after container ship Ever Given, which had grounded in the Suez Canal and blocked the waterway for almost a week, was refloated.

Read more: Suez Canal: Stranded ship Ever Given finally back on the move

But prices pushed up again after Reuters reported that Russia would support stable oil output from Opec+ ahead of a meeting later this week.

Brent oil rose 41 cents to $64.98 a barrel, while US crude was up 59 cents to settle at $61.56 a barrel.

According to the report, Russia will support broadly stable output by the producer group while seeking a relatively small output hike for itself to meet rising seasonal demand.

This gave a boost to prices after the incident in the Suez Canal, which has wreaked havoc for global supply chains for the last week, finally appeared to come to an end.

Footage from local media showed the 400-metre Ever Given surrounded by tug boats moving slowly in the centre of the canal.

Traffic resumed later in the day, allowing the backlog of more than 400 ships to begin passing through the key trading route.

Read more: Oil prices shoot up after mega container ship blocks Suez Canal

However, top shipping firms warned it could take weeks or even months to clear disruptions in the industry.

“The market will soon realise that despite the positive news, even if Ever Given leaves the Canal within days, some leftover downstream ripple effects should be expected in the meantime,” Louise Dickson, oil markets analyst, told Reuters.