Oil prices turn lower in Asian trade
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.