Crude Oil Ends Below $49 A Barrel, But Gains 4.9% For Week

(RTTNews) - U.S. crude oil snapped a five-day gain to end sharply lower Friday, on speculation that concerns over the Yemen military operations may be overdone. Crude oil prices surged during the week amid concerns of disruption in oil shipment from the Middle East after Saudi Arabia launched air strikes on Yemen.

Nevertheless, crude oil futures gained 4.9 percent for the week.

Meanwhile, tensions in the Middle East continued to rise with militants gaining ground over government troops. Saudi Arabia and Iran are seen in a proxy battle for control of Yemen, where fighting has raged between rebels and government forces.

An escalation of the conflict could interrupt supplies from the region, prompting oil prices to rally this week.

An unprecedented build in U.S. crude oil inventories is keeping prices in the $50 range despite the geopolitical flare-ups. Crude remains well away from a recent 6-year low near $42.

However, the number of U.S. active oil and natural gas rigs as of March 27 dropped to 1,048, down 21 rigs from a week ago, according to Baker Hughes. This compares with the decline of 56 rigs a week earlier.

Light Sweet Crude Oil futures for May delivery, the most actively traded contract, plunged $2.56 or 5.0 percent to settle at $48.87 a barrel on the New York Mercantile Exchange Friday.

Crude prices for May delivery scaled a high of $51.38 a barrel intraday and a low of $48.73.

On Wednesday, U.S. crude futures for May delivery surged $2.22 or 4.5 percent to settle at $51.43 a barrel, despite a weekly oil report from the Energy Information Administration indicated crude stockpiles to have risen more than expected last week for an eleventh straight week.

The dollar index, which tracks the U.S. unit against six major currencies, traded at 97.35 on Friday, down from its previous close of 97.41 on Thursday in late North American trade. The dollar scaled a high of 97.92 intraday and a low of 96.99.

The euro trended higher against the dollar at $1.0895 on Friday, as compared to its previous close of $1.0886 in North American trade late Thursday. The euro scaled a high of $1.0946 intraday and a low of $1.0803.

On the economic front, U.S. data came in mixed with fourth quarter GDP unrevised and a better than expected consumer sentiment report.

Economic activity in the U.S. grew at an unrevised rate in the fourth quarter of 2014, a final estimate from the Commerce Department showed Friday. Gross domestic product increased by 2.2 percent in the fourth quarter, unchanged from the growth estimated last month. Economists expected the pace of GDP growth to be upwardly revised to 2.4 percent, which would still reflect a notable slowdown from the 5.0 percent growth seen in the third quarter.

Consumer sentiment in the U.S. deteriorated by less than previously estimated in March, a report from the University of Michigan showed Friday. The final reading on the consumer sentiment index for March came in at 93.0 compared to the mid-month reading of 91.2. Economists expected a reading of 92.1, but was still below the final February reading of 95.4.

Germany's import prices declined at a slower-than-expected pace in February, figures from Destatis showed Friday. The import price index fell 3.0 percent year-over-year in February, below economists' expectations for a 3.9 percent decrease.

At the same time, German export price index climbed at a faster pace of 0.7 percent annually in February, following a 0.4 percent rise in the prior month. It was the sixth successive monthly increase.

U.K. house price growth softened for the seventh consecutive month to an 18-month low in March, the Nationwide Building Society reported Friday. House prices advanced 5.1 percent year-on-year in March, slower than February's 5.7 percent increase and a 5.3 percent rise forecast by economists. This was the slowest rate of growth since September 2013.

However, U.K. house prices rose 0.1 percent on a monthly basis offsetting a 0.1 percent drop seen in February. Economists had forecast a steeper 0.2 percent rise for March.

French consumer confidence improved as expected to the highest level since 2010, survey data from the statistical office Insee showed Friday. The households' consumer confidence index came in at 93 in March versus 92 in February. This was the highest score since November 2010 and came in line with expectations.