U.S. GDP pulls reins on oil prices

Crude oil prices pulled back Friday from sharp gains triggered by conflict in Yemen as U.S. data show a decline in economic growth in the fourth quarter.

The Commerce Department said Friday gross domestic product increased by 2.2 percent in the fourth quarter of 2014. That's down from the 5 percent increase in GDP during the third quarter.

Deceleration in GDP growth in the fourth quarter reflected in part an uptick in imports and a downturn in federal government spending. Corporate profits and related indices decreased $30.4 billion in the fourth quarter, compared with an increase of $64.5 billion in third quarter 2014, the Commerce Department said.

The slowdown pressured an economy already plagued by low demand. The price for West Texas Intermediate, the U.S. oil benchmark, fell nearly 2 percent from the previous session to trade near $50.40 early in the Friday session.

Oil prices soared Thursday after Saudi Arabia announced the launch of military operations in Yemen in a pan-Arab exercise dubbed Decisive Storm. Strikes are targeting the Houthi group, a Shiite movement said to have the support of Saudi Arabia's rivals in Iran.

Saudi military leaders said Friday the military operations took the Houthi movement "by surprise."

Yemen is an oil-producing state, though operations have been curtailed by lingering violence in a country already coping with Sunni-Shiite rivalries and the presence of fighters loyal to al-Qaida. Key shipping lanes off the Yemeni coast may be shuttered by the recent military escalation.

Iranian lawmakers this week condemned the military action in Yemen. For Iran, however, ongoing nuclear negotiations with Western powers could lead to an opening of the oil spigots for the Islamic republic.

The price for Brent crude oil dropped more than 2 percent from Thursday's close to around $58 per barrel for the May contract.