Suez Canal crisis: Oil dives as ship refloats

Oil prices slumped after reports stated that Ever Given that is blocking the Suez Canal has refloated. However, this is not the only reason for the decline in oil prices, traders point fingers towards the second wave of COVID-19 and its induced lockdown and all these factors accompanied by the OPEC and its ally countries policy meeting.

According to Bloomberg, West Texas Intermediate (WTI) dropped as much as 2.5 per cent, while Brent declined. In a recent session, crude has seen rising volatility.

The Ever Given has been successfully refloated and efforts are on to move it from the waterway will continue, the Suez Canal Authority said.

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.

There were hopes that global consumption of oil will pick up which lead to prices of crude oil rising in the last few weeks. But now the present losses due to the second wave of COVID-19 has hit the performance of oil again.

In addition, the Suez Canal crisis which has caused a vast backlog of ships on either side of the vital waterway. This has led to many some vessels to avoid the Canal and take another much costlier route around Africa. Rates for tankers have increased, boosting the cost of shipping crude around the world.