Oil prices turn lower in Asian trade

The China Post - - BUSINESS INDEX & -

Oil prices fell in Asia Mon­day but losses were limited as con­tin­ued fight­ing in Ye­men fu­eled fears about a sup­ply dis­rup­tion in the Mid­dle East, an­a­lysts said.

Amer­i­can bench­mark West Texas In­ter­me­di­ate fell 11 cents to US$57.04 while Brent crude de­clined two cents to US$65.26 in af­ter­noon trade.

Oil prices will “con­tinue to re­ceive sup­port as there seems to be no sign of abate­ment in the con­flict in Ye­men,” said Sanjeev Gupta, head of the Asia-Pa­cific oil and gas prac­tice at busi­ness con­sul­tancy EY.

Daniel Ang, in­vest­ment an­a­lyst at Sin­ga­pore-based Phillip Fu­tures, said the oil mar­ket re­mains “frag­ile” with “geopo­lit­i­cal ten­sions likely to play a key role on crude prices.”

Saudi Ara­bia-led war­planes hit the rebel-held pres­i­den­tial palace in Ye­men’s cap­i­tal Sanaa Sun­day, as fight­ing raged be­tween Shi­ite Huthi rebels and fighters loyal to the ex­iled pres­i­dent, Abedrabbo Man­sour Hadi.

The coun­try has been gripped by tur­moil since the Shi­ite rebels launched a power takeover in Sanaa in Fe­bru­ary.

Ye­men is not a ma­jor oil-pro­duc­ing coun­try, but its coast forms one side of the Bab el-Man­deb Strait, the key strate­gic en­try point into the Red Sea through which some 4.7 mil­lion bar­rels of oil pass each day on ships headed to or from the Suez Canal.

An­a­lysts said oil prices were also sup­ported af­ter data re­leased Fri­day by Baker Hughes showed the U.S. oil rig count fell by 31 to 703 this week, and well down from 1,534 a year ago.

Deal­ers are hop­ing a slow­down in U.S. out­put could al­le­vi­ate a global crude over­sup­ply, which led to a col­lapse in prices of more than 50 per­cent be­tween June and Jan­uary.

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