(Bloomberg) -- Oil was poised for a third weekly decline amid near-term demand concerns after a volatile few days that saw prices swing wildly around $60 a barrel, while a massive container ship remains stuck in the Suez Canal.
Futures in New York edged higher Friday but are still down more than 4% this week after U.S. coronavirus cases started to rise again and some European countries renewed lockdowns in a setback for the recovery. Volatility in the oil market has climbed to the highest since November and the prompt timespread for global Brent crude flipped briefly into a bearish structure on Tuesday.
A super dredger is the new tool being used to try and dislodge the ship in the Suez Canal, which is a key artery for crude and oil product flows. The blockage has led to rising shipping rates and a gridlock of vessels waiting to pass.
Despite the weekly loss, oil is still up more than 20% this year and there is confidence in the longer term outlook as vaccination rates accelerate and OPEC+ keeps supply in check. The group meets next week to decide on its production policy for May in a meeting that will be keenly watched.
Brent’s prompt timespread was 15 cents a barrel in backwardation -- a bullish structure where near-dated contracts are more expensive than later-dated ones -- on Thursday. That compares with 67 cents at the start of the month.
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