Oil prices soared higher this afternoon after one of the world’s largest container ships ran aground in the Suez Canal, blocking the major trade artery.
While equity markets were largely quiet earlier today, global energy trading went into a frenzy as fears the blockage could disrupt shipment for days sparked speculation that oil supply could be put under pressure.
The price of Brent crude oil increased by 5.77 per cent to $64.3 per barrel.
Edward Moya, senior market analyst at OANDA, commented this evening that “energy traders were trying to get a quick assessment on how long will a massive container ship block one of the world’s busiest waterways.”
“Oil rallied on fears that the stranded ship could be stuck for days, then pared gains after it seemed canal traffic would resume imminently, eventually settling near session highs after news that traffic should resume later today or by Thursday,” Moya added.
Europe’s largest stock markets continued to feel a drag as coronavirus cases continue to rise on the continent.
London stocks were the most resilient, pushing marginally higher as the bullish rise in oil and copper prices buoyed BP, Royal Dutch Shell, Rio Tinto, Glencore and Anglo American.
The FTSE 100 closed 13.7 points, or 0.2 per cent, higher at 6,712.89 today. Elsewhere, the German Dax decreased by 0.35 per cent and the French CAC moved 0.03 per cent higher.
Meanwhile, sterling lost pace against the dollar and euro after traders were caught off guard by a slump in inflation to 0.4 per cent, with experts having forecast a rise to 0.8 per cent for the month.
The pound decreased by 0.26 per cent versus the US dollar to 1.371 and was down 0.07 per cent against the euro at 1.159.