Oil futures retreated Friday, ending a five-session streak of gains, but remained on track for a 7% weekly climb fueled in part by an escalating conflict in Yemen. Meanwhile, the number of active oil and natural-gas drilling rigs fell for a 16th week in a row, but the data showed a slowdown in the declines. West Texas Intermediate crude for delivery in May traded at $49.77 a barrel, down $1.66, or 3.2% on the New York Mercantile Exchange, with the front-month contract trading about 6.8% higher for the week following a 4.5% jump on Thursday. May Brent crude on London’s ICE Futures exchange fell $1.53, or 2.6%, to $57.66 a barrel, leaving it with a weekly gain of around 4.2%.
The crude complex unwound some of Thursday’s “geopolitically-sponsored gains, as fears of contagion spreading in the Middle East calm,” said Matt Smith, a commodity analyst at Schneider Electric. “Bombings on Yemen’s capital of San’a by a coalition led by Saudi Arabia have continued overnight, with ground troops readied to enter the country should the need arise,” he said.
Meanwhile, nuclear talks continue between Iran and leading Western powers, with the next deadline on Tuesday, he said. Market participants have worried that an agreement on Iran’s nuclear program would ease oil sanctions on the country and add to global crude supplies.
On Friday, Baker Hughes reported that the number of U.S. active oil and natural gas rigs as of March 27 fell to 1,048, a drop of 21 rigs from a week earlier. The count was down 56 in the prior week.