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Brent choppy ahead of rig data, Yemen turmoil supports

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Reuters NEW YORK
Last Updated : Apr 17 2015 | 10:48 PM IST

By Robert Gibbons

NEW YORK (Reuters) - Brent crude seesawed, while U.S. crude fell on Friday as turmoil in Yemen and the region limited losses ahead of fresh data on rig counts in the United States.

Brent and U.S. crude contracts rallied to 2015 peaks on Thursday, lifted by the conflict in Yemen and the prospect that lower prices are starting to curb U.S. shale output.

Brent was on pace to post a double-digit percentage gain for the week, a second consecutive rise and the fourth in five weeks.

The near 10 percent jump will be the fifth straight weekly rise for U.S. crude and the big percentage jumps for it and Brent would be the biggest in several years.

Brent June crude was up 2 cents at $64.00 a barrel at 12:31 p.m. EDT (1631 GMT), after posting Brent's 2015 high at $64.95 on Thursday.

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U.S. May crude, set to expire on Tuesday, was down 58 cents at $56.13. It reached its 2015 peak at $57.42 on Thursday.

Oil traders awaited the latest snapshot on U.S. drilling around 1:00 p.m. EDT, after last Friday's report showed the biggest weekly rig count drop in a month.

"We feel a repeat of last week's 42 or more oil rig decline could easily trigger another buying spree while a decline of less than 25 could force values back toward the mid-week lows," Jim Ritterbusch, president at Ritterbusch & Associates, said in a note.

Military units protecting Yemen's Masila oilfields, withdrew on Friday and handed over security responsibilities to local tribes, in a sign of the weakening grip of the Yemeni state over its land and resources.

While Yemen is not a major oil producer, the conflict raises concern about risks to supply from the region's major exporters, especially neighboring Saudi Arabia.

Prices also drew support from traders closing out short positions, encouraged by strong technical factors, said Rob Montefusco, senior oil trader at Sucden Financial.

"Technically, Brent is looking in better shape at the moment," he said.

Brent and U.S. crude pushed above their 100-day moving averages this week. Brent's 50-day of $58.18 moved above its 100-day at $57.90 on Friday, a bullish move called a "golden cross" by chart watchers. That puts the 100-day average as a new major support level.

Oil prices are trying to recover after plunging more than 50 percent from June 2014 amid a global supply glut.

(Additional reporting by Himanshu Ojha and Alex Lawler in London and Henning Gloystein in Singapore; Editing by William Hardy and Gunna Dickson)

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First Published: Apr 17 2015 | 10:38 PM IST

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