Hong Kong (CNN Business)Oil prices are falling after the Ever Given container ship was partially pried free in the Suez Canal, giving rise to hopes that a crucial lane of global trade can soon reopen.
Futures for Brent crude, the global benchmark, were last down 2% to $63.28 a barrel, while West Texas Intermediate futures, the US benchmark, fell 2% to $59.77.
The Suez Canal Authority said that the ship blocking the Egyptian canal had been mostly dislodged, and that authorities planned to fully refloat it Monday. The 224,000-ton vessel had been stuck for nearly a week.
“The container ship began to float successfully after responding to the pulling maneuvers,” the head of the authority, Osama Rabie, said in a phone interview with state TV.
The authorities will now keep the freed stern of the ship away from the bank as they work on pulling the front out.
Earlier, the canal authority had said in a statement that salvage crews were attempting to refloat the ship, with 10 tug boats being used to pull it from both front and back to try to extricate it.
The Suez Canal is one of the world’s most vital trade arteries, and analysts at Commerzbank warned last week that the blockage threatened to cause oil to become more expensive for consumers due to higher tanker rates.
On Monday, Jeffrey Halley, senior market analyst of Asia Pacific at Oanda, said that “volatile trading is set to continue.”
“News that the Ever Given appears to have been refloated in the Suez Canal has sent prices immediately lower in Asia; [with] hopes rising that the delivery bottleneck to Europe will soon reopen,” he wrote in a note to clients.
“The knock-on effects are still reverberating through world trade, and account in no small part for the rise in oil prices on Friday.”
Halley predicts that stocks could soon start to swing, too.
“The Suez Canal developments will be a robust short-term tailwind for Asian equities, and they will also boost sentiment in Europe,” he wrote.
Japan’s Nikkei 225 (N225) was up 0.7%, while China’s Shanghai Composite (SHCOMP) added 0.6%. Hong Kong’s Hang Seng (HSI) and South Korea’s Kospi (KOSPI) slipped 0.2%.
The Ever Given, a massive container ship almost as long as the Empire State Building is tall, ran aground in the Egyptian canal on March 23. A massive effort to salvage the ship has focused on dredging sand from below the front and rear of the ship, before pulling the ship with tugboats.
— CNN’s Hamzeh Noami in Dubai, Mostafa Salem in Abu Dhabi, Ghazi Balkiz and Magdy Samaan in Cairo, and Jessie Yeung in Hong Kong contributed to this report.
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