Thursday, March 26, 2015

Oil Up on Yemen Fighting, Weak Dollar

Oil settled up about three percent on Wednesday as a weak dollar, fighting in Yemen and speculative buying boosted crude prices despite record-high US inventories.

Benchmark Brent oil for May delivery edged up 3.17 percent at $58.27 per barrel.

US crude, also known as West Texas Intermediate, or WTI, finished up 3.82 percent, at $51.09 a barrel.

A widening Yemen conflict could pose risks for global oil supplies, and Brent  crude prices shot up nearly 6 percent soon after the operation began.

Saudi Arabia and Gulf region allies launched military operations in Yemen, including air strikes on rebel forces besieging the southern city of Aden, where the US-backed Yemeni president Abed Rabbo Mansour Hadi had taken refuge.

Gulf broadcaster al-Arabiya TV said planes from Egypt, Morocco, Jordan, Sudan, Kuwait, the United Arab Emirates, Qatar and Bahrain were taking part in the operation.

Unidentified warplanes had earlier launched air strikes on the main airport in the Yemeni capital, Sanaa, and its al Dulaimi military airbase, residents said.
While Yemen contributes less than 0.2 percent of global oil output, its location puts it near the center of world energy trade.

“Yemen is not an oil producer of great significance but it is located geographically and politically in a very important part of the Middle East,” Ric Spooner, a chief strategist at CMC Markets in Sydney, told Bloomberg.


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