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Eight tug boats were attempting on Wednesday to free a 400 metre
(440 yard) long container ship that ran aground in the Suez
Canal, blocking vessels passing through one of the world's most
important waterways.
"Price support is coming courtesy of a transport blockage," said
Stephen Brennock of oil broker PVM. "Yet market sentiment will
likely struggle to shake off its newfound bearish trend."
Brent crude rose $1.75, or 2.9%, to $62.54 a barrel by 1021 GMT,
after tumbling 5.9% the previous day. West Texas Intermediate (WTI)
climbed $1.59, or 2.8%, to $59.35, having lost 6.2% on Tuesday.
"The potential disruption to supplies has lifted prices," said
Jeffrey Halley of brokerage OANDA, referring to the Suez
incident. "The reprieve seems temporary, though."
Oil has recovered from historic lows reached last year as OPEC
and its allies made record output cuts. But both benchmarks
touched their lowest since February on Tuesday, hit by worries
over the pace of economic and demand recovery.
Germany, Europe's biggest oil consumer, extended its lockdown to
April 18. Italy, France and other European countries have also
re-imposed movement restrictions.
Adding to downward pressure, U.S. crude oil inventories jumped
by 2.9 million barrels last week, according to trading sources
citing data from industry group the American Petroleum
Institute.
The official U.S. supply report is due at 1430 GMT from the
Energy Information Administration (EIA). Analysts expect crude
stocks to decline by about 300,000 barrels.
OPEC and its allies, known as OPEC+, meet on April 1 to consider
whether to unwind more of their output cuts. Given the latest
price drop, the prospect of further easing is "zero at this
stage," Halley of ONADA said.
(Additional reporting by Yuka Obayashi; Editing by Edmund Blair)
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