Oil off 2015 high on Saudis' Yemen action; Cushing draws help

Mon May 4, 2015 1:20pm EDT
 
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By Barani Krishnan

NEW YORK (Reuters) - Oil prices retreated on Monday after key Brent crude hit a 2015 high as Saudi Arabia's plan to halt bombing in Yemen eased tensions over the security of supplies from the Middle East region.

A surge in the dollar, following the largest U.S. factory orders in eight months, also weighed on crude. [FRX/]

Even so, the price drop was cushioned by data from market intelligence firm Genscape showing a further tightening in supplies at the U.S. crude storage hub in Cushing, Oklahoma.

U.K. Brent crude LCOc1, the more widely used global oil benchmark, was down 20 cents at $66.26 a barrel by 12:32 p.m. EDT, after touching the year's high of $67.10 earlier.

A public holiday in Britain limited early trading volumes in Brent.

U.S. crude CLc1, was 37 cents lower at $58.78.

A Saudi-led Arab alliance, waging an air campaign against Houthi fighters in Yemen, was considering calling a truce to allow humanitarian relief, Saudi-owned al-Arabiya television quoted the country's foreign minister as saying.

"The reducing of tensions in Yemen and the Middle East was certainly a negative to the geopolitics around oil today," said Phil Flynn, analyst at the Price Futures Group in Chicago.   Continued...

 
A pump jack is seen at sunrise near Bakersfield, California October 14, 2014.  REUTERS/Lucy Nicholson