Oil falls more than $1 as supply fears ease

Goldman Sachs said the bombing of Yemen would have little effect on oil supplies.

London — Oil prices fell more than $1 a barrel on Friday as worries receded over the threat of disruptions to Middle East supplies due to Saudi Arabia-led air strikes in Yemen.

Goldman Sachs said the bombing of Yemen would have little effect on oil supplies as the country was only a small crude exporter and tankers could avoid passing its waters to reach their ports of destination.

Brent crude was down $1.30 at $57.89 a barrel by 1330GMT after hitting a low of $57.76. US crude was down $1.20 at $50.23. Oil jumped around five per cent on Thursday.

Brent was headed for almost a five per cent weekly rise — the biggest gain since early February. US crude was set for a 10 per cent jump — the most since the start of 2011. Yemen is a small oil producer, with an output of around 145,000 bpd in 2014 and analysts say the conflict there is very unlikely to hit Middle East fuel supplies. “The impact on oil market balances is negligible,” Energy Aspects analyst Virendra Chauhan told Reuters Global Oil Forum.

A bigger impact could come from a nuclear deal with Iran, which could result in a loosening of Western sanctions against Tehran and rising exports of its oil reserves.