Oil Erases Gains as Traders Shrug Off Rising Middle East Tension
Oil fell, erasing earlier gains, as investors shrugged off concerns over geopolitical risks after Saudi Arabia intercepted ballistic missiles fired by Houthi forces in Yemen.
“The Yemen attack froze investors’ blood and raised prices,” Takayuki Nogami, chief economist at state-backed Japan Oil, Gas & Metals National Corp., said by phone from Tokyo. “But the view now is that the situation hasn’t really changed yet as Saudi Arabia intercepted the missiles, so investors are taking profit.”
West Texas Intermediate crude for May delivery fell as much as 42 cents to $65.46 a barrel on the New York Mercantile Exchange, erasing an earlier 67-cent gain. The contract traded at $65.60 at 3:47 p.m. in Tokyo. Total volume traded was about 72 percent above the 100-day average.
Brent for May settlement dropped as much as 31 cents to $70.14 a barrel the London-based ICE Futures Europe exchange. The contract advanced $1.54 to $70.45 on Friday, the highest level since late January. The global benchmark traded at a $4.67 premium to WTI.
China’s yuan-denominated futures for September settlement traded at 429.8 yuan a barrel ($68.16) on the Shanghai International Energy Exchange at a midday trading break. Futures attracted more volumes than at least one global benchmark during Asian hours.
Meanwhile, in the U.S., drillers added four working rigs last week, bringing the total to 804, the highest since March 2015, according to Baker Hughes data released Friday. That’s the eighth increase in nine weeks.
Other oil-market news:
- Hedge funds ratcheted up bets that WTI crude would rise and slashing short-selling to the lowest level since July 2014, according to the U.S. Commodity Futures Trading Commission.
- China Petroleum & Chemical Corp., the world’s biggest refiner, will pay a record-high dividend as its massive fuels and chemical segments helped it post a nearly 10 percent increase in full-year profit.