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Oil dives 4.7% on easing Yemen worries
[NEW YORK] Oil prices sank Friday, giving back some gains from a two-day surge, as traders kept an eye on the Saudi-led air assault against Shiite rebels in Yemen.
US benchmark West Texas Intermediate (WTI) for May delivery snapped a six-day winning streak, plunging US$2.43 to US$48.87 a barrel on the New York Mercantile Exchange.
The global benchmark, Brent North Sea crude for delivery in May, shed US$2.78 to settle at US$56.41 a barrel on the Intercontinental Exchange in London.
"The petroleum markets are retreating as tensions over the Saudi-led airstrikes against Huthi positions inside Yemen ease," said Tim Evans of Citi Futures.
Prices rose sharply Wednesday and Thursday on news of escalating unrest in Yemen as Shiite rebels advanced their power grab.
On Thursday, a Saudi-led coalition bombed the rebels in support of Yemen's embattled President Abedrabbo Mansour Hadi, pushing WTI to a one-month high of US$52.48 and Brent to a March 9 peak of US$59.78.
The coalition air strikes continued Friday as Hadi arrived in Egypt for talks with Arab allies.
"The crude complex is unwinding some of yesterday's geopolitically sponsored gains, as fears of contagion spreading in the Middle East calm," said Matt Smith of Schneider Electric.
Yemen is a small oil producer that sits along the Bab al-Mandab Strait, through which about 3.8 million barrels of oil per day are transported.
The country has been gripped by turmoil since the Shiite rebels launched a power takeover in Sanaa in February.