Oil prices slipped moderately during the week ending March 26 over potential demand declines from restrictions and lockdowns following a third wave of the COVID-19 pandemic, but these declines were limited with delayed oil supplies as a result of the Suez Canal blockage that hampered passage to oil tankers.
International benchmark Brent crude traded at $63.31 at 1228 GMT on Friday, posting a 0.58% decrease from Monday when trade at 0722 GMT registered at $63.68 per barrel.
American benchmark West Texas Intermediate (WTI) traded at $59.98 at the same time on Friday, dropping 1.03% relative to $60.61 a barrel on Monday.
Oil prices started the week on a negative note, primarily driven by investor jitters over a possible demand decline as several European countries announced plans to increase measures against the rising number of coronavirus cases. The President of the European Commission, Ursula von der Leyen, warned Thursday that the EU is at the start of a third wave of the pandemic with infections on the rise again, mostly due to the variant B117.
Nonetheless, investors who took the opportunity to benefit from low oil prices have driven up demand in support of higher prices by midweek.
On Thursday, the Energy Information Administration announced that US crude oil inventories raised more than expected by 1.9 million barrels to 502.7 million barrels, relative to the market expectation of a build of 900,000 barrels. Signaling a fall in crude demand in the world's largest oil consumer, the data limited Wednesday's oil price gains.
However, prices were stopped from falling further on Friday after Suez Canal tanker traffic was halted after a container ship ran aground in the canal, blocking ten tankers carrying 13 million barrels of crude oil, according to oil analytics firm Vortexa.
As rescue efforts continue in the canal, the authorities say it could take days to weeks to free the ship, raising fears of severe delays to oil supplies.
Riyadh's announcement at dawn on Friday that a fire broke out in an oil facility after it was targeted with a projectile in the southern region of Jizan also limited further price declines. No casualties were reported in the attack although the kingdom said on Friday it shot down eight explosives-laden drones launched by Yemen's Houthi rebel group towards the kingdom.
By Ebru Sengul Cevrioglu