Oil retreated as salvage teams refloated the giant vessel that has been blocking the Suez Canal, and traders weighed the impact of renewed lockdowns on global energy consumption before an OPEC+ policy meeting. West Texas Intermediate lost as much as 2.5%, while Brent fell. Crude has seen rising volatility in recent sessions, with WTI swinging between gains and losses last week. The Ever Given has been successfully refloated and maneuvers to move it from the waterway will continue, the Suez Canal Authority said.

The Suez blockage and a looming OPEC+ meeting to drive oil this week

Traders were also tracking the advent on Monday of a significant new contract, with Abu Dhabi kicking off futures for its oil in a bid to establish a fresh 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.

Oil is still 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 meet on April 1.

“With the Suez and OPEC+ uncertainties on top of a foggy demand picture, we may see big mood swings and high intraday volatility,” said Vandana Hari, founder of consultancy Vanda Insights. “I don’t see how OPEC+, or the Saudis, could risk putting more oil into the market after the downward pressure on crude of the past fortnight.”

  • WTI for May delivery was 2.1% lower at $59.67 a barrel on the New York Mercantile Exchange at 7:17 a.m. in London.
    • Prices have still rallied about 23% since the start of the year, and a fourth quarterly rise would cap the best run since the period to mid-2018.
  • Brent for May settlement tumbled 1.8% to $63.44 a barrel on the ICE Futures Europe exchange.
  • Murban for June delivery traded at $62.24 a barrel on the ICE Futures Abu Dhabi.
  • The Bloomberg Dollar Spot Index gained 0.2%.