Oil prices fell and lost points scored in the morning, quickly digesting geopolitical risks, which increased after Saudi Arabia intercepted ballistic missiles launched from the territory of Yemen.
Futures in New York are traded with a decrease of 0.6%. Previous quotes jumped more than 1% amid rumors that the deteriorating situation in Yemen could lead to disruptions in supplies in the Middle East. Meanwhile, China has launched futures contracts for oil in yuan, in an attempt to expand its influence in pricing and challenge the benchmarks of the US and Europe.
Over the past five days, prices for black gold have shown the biggest yesterday's increase after US President Donald Trump appointed John Bolton as national security adviser. For the market, this signaled that America could take a tougher stance on Iran, a major producer of OPEC. In addition, if Saudi Arabia faces supply disruptions, the market may face supply shortages, as the growth of shale production in the US in this case will be insufficient to compensate for the reduction in supplies in the Middle East, according to the Japanese state corporation Japan Oil, Gas and metals National corporation.
"The attack on the part of Yemen caused investors to be nervous and provoked a price increase. But as soon as it became known that the Saudis intercepted the missiles, the players immediately set about recording profits, "comments Takayuki Nogami, a senior economist at the state-owned company.
May futures for WTI on the New York Mercantile Exchange dropped 42 cents to $ 65.64 after a 67 cents jump in the morning. The aggregate trading volumes almost by 72% exceeded the 100-day average. Similar contracts for Brent retreated to $ 69.58 on the London intercontinental stock exchange. On Friday, prices increased by $ 1.54 - to $ 70.45, touching the highs of the end of January. The global benchmark is trading at a premium to WTI of $ 4.67.
Chinese yuan futures on the Shanghai International Energy Exchange traded at 429.8 yuan per barrel ($ 68.16) at noon. During the Asian trade, new futures showed higher trading volumes than the international benchmark. Earlier, quotations in New York and London sharply upset the news that they met in Saudi Arabia. The Kingdom reported the interception of seven ballistic missiles, which the markets perceived as an escalation of the conflict in the region.
Meanwhile, drilling activity continued to grow in the US last week. According to Baker Hughes, the number of operating installations increased by four, to 804 units, which became the maximum since March 2015. This is the eighth increase in the number of drilling operations in the last nine weeks.
