Crude oil prices have rebounded from dip a day earlier. Credit: C Morrison / Pixabay.

Crude oil prices have edged up over concerns that it may weeks to free a cargo ship stuck in the Suez Canal, raising fears of supply constraints in the global oil market.

Brent crude surged by $0.43, or 0.7%, to reach $62.38 a barrel after slipping 3.8% a day earlier while the US West Texas Intermediate (WTI) crude rose by $0.49, or 0.8%, to reach $59.05 a barrel after tumbling 4.3% on Thursday, reported Reuters.

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On 23 March, a large container ship ran aground in the Suez Canal blocking what is claimed to be one of the world’s busiest shipping lanes for trade between Asia and Europe.

Officials have closed the lane and diverted all ships from the passage. The salvage company said it could take weeks to free the grounded vessel.

Nissan Securities researcher Yasushi Osada was cited by the news agency as saying “Expectations that the blockage of the Suez Canal may last for weeks raised fears of supply tightness in oil markets.

“But lingering worries that a fresh wave of lockdowns in Europe and elsewhere may slow a recovery of global fuel demand are expected to limit price gains.”

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On the other hand, European countries are renewing lockdowns to contain the fresh wave of the Covid-19 pandemic, triggering concerns over reduce fuel demand from the region.

Moreover, India is witnessing the spread of a new wave of infections, hitting the highest level in five months.

According to industry sources, oil producers are facing difficulty in selling fuel to buyers in Asia, especially China, as they are buying cheaper oil from storage. This, in turn, is adding pressure on the oil market.