UPDATE 5-Oil jumps 4% on fears Suez Canal blockage may last weeks

* Brent, WTI set for 3rd weekly loss
* Ship blocking Suez may take weeks to free-salvage firm
* Shipping rates rise, oil and gas tankers diverted
* UAE's ADNOC deepens supply cuts to Asia in June -sources
* Coming Up: Baker Hughes weekly U.S. rig count at 1
p.m./1700 GMT

(Updates prices, market activity, adds commentary; changes
byline, dateline, previous LONDON)
By Stephanie Kelly
NEW YORK, March 26 (Reuters) - Oil prices rose more than 4%
on Friday, rebounding on concerns it could take weeks to
dislodge a giant container ship blocking the Suez Canal, which
would squeeze supplies of crude and refined products.
Prices, however, were still headed for a third consecutive
weekly loss, with the outlook for demand dented by fresh
coronavirus lockdowns in Europe.
Brent crude LCOc1 rose $2.37, or 3.8%, to $64.32 a barrel
at 10:57 a.m. EDT (1457 GMT), after dropping 3.8% on Thursday.
U.S. West Texas Intermediate (WTI) crude CLc1 rose $2.38,
or 4.1%, to $60.94 a barrel, having tumbled 4.3% a day earlier.
Brent was on track to end the week down 0.2%, and WTI down
0.6%, their third weekly loss.
Oil trade was volatile this week, as traders assessed how
long the Suez Canal blockage which happened on Tuesday will
last, while also determining the effect new coronavirus
lockdowns in Europe will have on demand.
"Today the market is up again as traders in a change of
heart decided that the Suez Canal blockade is actually becoming
more significant for oil flows and supply deliveries than they
previously concluded," said Paola Rodriguez Masiu, Rystad
Energy's vice president of oil markets.
Egypt's Suez Canal Authority said on Friday operations to
free the stranded container ship would resume after completing
dredging operations, which are 87% complete.
The salvage company said on Thursday that dislodging the
ship could take weeks. Of the 39.2 million barrels per day (bpd) of total seaborne
crude in 2020, 1.74 million bpd went through the Suez Canal,
according to data intelligence firm Kpler. Additionally, 1.54
million bpd of refined oil products flow through the canal,
about 9% of global seaborne oil product trade, Kpler said.
On Friday, there were ten vessels waiting at the entry
points of the Canal carrying around 10 million barrels of oil,
Kpler said.
Reeling from the blockage in the Suez Canal, shipping rates
for oil product tankers have nearly doubled this week, and
several vessels were diverted. The oil markets were also lifted by worries over escalating
geopolitical risk in the Middle East. Yemen's Houthi forces on
Friday said they launched attacks on facilities owned by Saudi
Aramco. Expectations that the Organization of the Petroleum
Exporting Countries and its allies will likely maintain their
lower production also supported prices.
Big oil importer India said Saudi Arabia telling it to tap
its oil stockpiles to tackle high prices was "undiplomatic."
Acting a week ahead of the OPEC+ meeting, Abu Dhabi National
Oil Company (ADNOC) has deepened crude oil supply cuts to Asian
customers in June to 10%-15% from 5%-15% in May, several sources
said. Still, the potential negative effect on demand from the
coronavirus pandemic loomed. Germany's third wave of the
coronavirus could turn into the worst one so far and 100,000 new
daily infections is not out of the question, the head of the
German Robert Koch Institute (RKI) said on Friday.