After moving down early in the week, prices then recovered, with Brent ending the week slightly higher at $64.57 per barrel, while West Texas Intermediate crude price rose to $60.97 per barrel.
The Suez Canal traffic jam did not weigh on oil prices too heavily as the oil shipments were headed to Europe, where demand was already weak, meaning the incident did not cause any serious supply fears.
However, while oil price movement might be detached and disconnected from the impact of the Suez Canal closure, it is still unclear if it will have any strong repercussions, as prices remained relatively settled in a very narrow range below $65 per barrel, despite the new lockdowns and the news that the US will soon become a fully vaccinated nation.
Moreover, the weakness in the nearest part of the futures prices curve has nothing to do with the Suez Canal closure or the weak demand, but it is mainly due to Chinese crude inventories that have climbed back near their peak in October 2020. Such futures curve weakness may lead OPEC+ to continue its tight market strategy when they meet in early April.
US oil field services company Baker Hughes said that the rig count has been rising over the past seven months and is up nearly 70 percent from a record low of 244 in August 2020, when drilling activities were adversely impacted by the oil demand shock amid the pandemic.
The latest figures from the Commodity Futures Trading Commission on March 23, 2021 showed crude futures “long positions” on the New York Mercantile Exchange at 681,647 contracts, down by 4,698 contracts from the previous week (1,000 barrels for each contract).