Oil is trading 2% higher today and attempts to recover from a massive sell-off that happened yesterday. Crude price is being supported by supply issues, namely Suez Canal being blocked. One of the world's largest container ships got stuck in the Canal today and completely halted traffic through the waterway. Suez Canal is one of the busiest trade routes in the world - around 50 container ships carrying more or less 25 million tonnes of cargo passes the Canal each day, including oil. It is said that it may take a few days until passage is cleared and it may lead to 2021 global trade volume being 1-2% lower. This is a major supply disruption and given current market reaction, investors may be underestimating the damage.
Taking a look at Brent (OIL) at the H4 interval, we can see that the price of the commodity reached $60.30, the lowest level since early-February 2021. Buyers took over in this area and upward correction began. OIL is currently trying to break back above the $62.00 resistance zone and in case it succeeds, the commodity may look towards the next resistance in line - 38.2% retracement of recent downward move ($64.50 area).
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Source: xStation5
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