Oil rises with market eyeing OPEC+ meeting, Suez Canal reopening

West Texas Intermediate erased earlier declines, following volatile trading in recent days. The market’s focus remains on the demand impact of renewed coronavirus lockdowns before the OPEC+ discussions on output policy on Thursday.

Oil rose with traders looking ahead to an OPEC+ meeting this week and as salvage teams partially refloated the giant vessel that has been blocking the Suez Canal for days.

Traders were also tracking the introduction on Monday of a new futures contract, with Abu Dhabi kicking off its bid to establish a new benchmark.(Reuters file photo. Representative image)

West Texas Intermediate erased earlier declines, following volatile trading in recent days. The market’s focus remains on the demand impact of renewed coronavirus lockdowns before the OPEC+ discussions on output policy on Thursday. The first steps have been taken toward reopening one of the world’s most important waterways, maneuvers continue to fully free the Ever Given container ship.

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Oil is set to close out a fourth consecutive quarterly gain this week, aided by sustained supply curbs imposed by the Organization of Petroleum Exporting Countries and its allies, and optimism that global demand will expand as coronavirus vaccines get rolled out. But a run of three weekly losses for WTI has put a dent in crude’s performance, underpinning speculation that OPEC+ will again refrain from easing curbs when ministers hold their virtual meeting this week.

With work to free the Ever Given appearing to make progress “the oil market is left to its own fundamental devices,” said Tamas Varga, analyst at brokerage PVM Oil Associates. “Attention will shift back to the stuttering inoculation programs, the seemingly unstoppable rise in infection rates in several parts of the world and the upcoming OPEC meeting.”

Traders were also tracking the introduction on Monday of a new futures contract, with Abu Dhabi kicking off its bid to establish a new benchmark. The product “provides an additional tool that the market has been looking for,” Khaled Salmeen, executive director of supply and trading at Abu Dhabi National Oil Co., said in an interview with Bloomberg Television.

The crisis in the Suez Canal has caused a huge backlog of ships at both ends of the vital waterway, and spurred some vessels to avoid the congestion by taking the longer, much costlier route around Africa. Rates for tankers have increased, boosting the cost of shipping crude around the world.