A ‘mega ship’ is grounded in the Suez Canal in Egypt, causing a traffic jam in both directions.
The ultra large container ship is reportedly stuck sideways, toward the south end of the canal. Tugs are trying to dislodge the ship but, in the meantime, no other ships can pass through this important waterway.
The Suez Canal is one of the world’s busiest maritime trade routes for oil. The price of oil has been under pressure recently, but news of the MV Ever Given hull getting stuck length-wise in the canal is causing what’s called a “contango” in the oil markets. Near-dated futures contracts are cheaper than later-dated contracts.
The affect on oil supplies as a result of the canal blockage is considered temporary.
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Meanwhile, Goldman Sachs continues to be bullish on oil with a price target of $80 a barrel by summer.