Oil prices fall over ME concerns

Global oil prices slipped on profit-taking in Asia on Friday, reversing sharp gains reached in the previous session amid concerns that unrest in the Middle East could hurt supplies from the crude-rich region, analysts said.

US benchmark West Texas Intermediate (WTI) fell 32 cents to USD 57.42 while Brent eased 28 cents to USD 64.57 in afternoon trade. On Thursday WTI gained USD 1.58 and Brent advanced USD 2.12, AFP reported.

“It seems to be profit-taking at the moment for oil after gains due to supply-side and geopolitical catalysts,” said Nicholas Teo, market analyst at CMC Markets in Singapore.

“Rumblings from Saudi Arabia about Yemen have influenced prices in the past few days,” he added.

Saudi warplanes launched more illegal strikes in Yemen on Thursday amid calls from Houthi movement’s Ansarullah revolutionaries who urged a complete halt to the raids as a condition for UN-sponsored peace talks.

The new wave of strikes killed at least 23 people as the World Health Organization said the overall death toll from fighting since late March exceeded 1,000.

Yemenis check the damage following a raid by Saudi warplanes on a missile depot on Fajj Attan hill, in the rebel-held part of the Yemeni capital, in southern Sana’a, on April 20, 2015. ©AFP

Yemen’s coast forms one side of the strategic strait of Bab-el-Mandeb, through which some 4.7 million barrels of oil passes each day on ships headed to or from the Suez Canal.

Daniel Ang, investment analyst at Phillip Futures in Singapore, said oil prices will likely see further gains following signs that US crude production is easing.

The US Department of Energy said on Wednesday that production fell by 18,000 barrels a day in the week to April 17, following a 20,000-barrel drop in the previous week.

Total reserves in the top crude consumer, however, stand at record levels, adding 5.3 million barrels in the same period.

Dealers hope that a slowdown in US shale output could make up for a global crude oversupply, which led prices to more than halve between June and January.

“Although inventories obviously show bearishness, production has stopped increasing, which is an event we have been waiting for” since prices hit their low, Ang said.