Suez Canal blockage rallies Brent and European oil products

The roller coaster in oil markets continued Wednesday after news of a container ship blocking the Suez Canal saw May Brent almost recover its losses over Tuesday.

A 400m long container ship called Ever Given became wedged in one of the narrowest stretches of the canal late Tuesday.

The impact overshadowed a bearish US government weekly oil statistics report, revealing a 1.9 million-barrel gain in crude stocks, a 3.8 million barrel build in distillate stocks, and a 200,00 barrel build in gasoline stocks.

Total refined product demand in the US was down around 1.2% over the week to March 19, with a 440,000 barrel fall in distillate demand trumping a 170,000 barrel gain in gasoline demand.

May Brent jumped to $64.07/b by 16.30pm UK time, up $1.77/b from the same time Tuesday, and almost back to Monday's late afternoon marker value of $64.35/b.

Products

Premium unleaded gasoline barges in AR were up $24/mt on news of the Suez Canal re-opening, while Fob Mediterranean prices edged the gain with a rise of $20.50/mt.

Naphtha cargoes prices jumped on news of the arbitrage route opening again, jumping $34.75/mt ($3.85/b) higher.

Distillate cracks in Europe softened, with diesel products regaining between $11 and $12/mt from yesterday, compared to Wednesday's falls of $16.25/mt and more.

Jet prices dragged their heels on the prospect of the arbitrage route opening from the east, with barges up $10.25/mt ($2.129/b).

High sulfur fuel oil barges recovered almost all the lost ground from yesterday, rallying $11/mt compared to Wednesday's $11.75/mt fall. But there was less of a recovery in marine (0.5% sulfur) fuel, gaining $7/mt today in the ARA barge market after falling $17.25/mt yesterday.