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Oil prices fell in Asia today after a Saudi-led coalition declared an end to four weeks of air strikes in Yemen and ahead of a key US supply report.
US benchmark West Texas Intermediate fell 52 cents to $56.09, while Brent crude fell 42 cents to $61.66 in late morning trade.
Analysts said dealers were sitting on the sidelines ahead of the release of the official US stockpiles report later today.
“We expect a positive build in the US oil inventories,” said David Lennox, resource analyst at Fat Prophets in Sydney.
The Department of Energy is expected to report that supplies rose 3.2 million barrels in the week to April 17, according to a Bloomberg News survey of analysts.
Gains in US petroleum reserves typically indicate slack demand in the world’s top crude consumer, pushing global prices down.
Total reserves in the US are currently at a 85-year-high, contributing to a global supply glut that was the main factor for the commodity’s collapse of more than 50 per cent between June and January.
Lennox said the end of Saudi-led military strikes against rebels in Yemen yesterday have put a lid on prices amid easing fears of the unrest spreading to other parts of the crude-rich West Asia.
Although Yemen is not a particularly important oil producer, market watchers have been worried about the impact of the turmoil on the oil-rich region, notably in Iran, which is suspected of supporting the rebellion.
“We don’t expect much impact of the Yemen situation to oil prices in the long run,” said Lennox.
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