SINGAPORE: Oil prices jumped more than five percent in Asia on Thursday after Saudi Arabian jets struck rebel targets in Yemen, with fears growing that a spiralling crisis in the country could threaten key crude producers in the Middle East.
US benchmark West Texas Intermediate (WTI) for May delivery rose $2.87, or 5.83 percent, to $52.08 while Brent crude for May rose $2.90, or 5.13 percent, to $59.38 in afternoon trade.
The contracts also rallied on Wednesday following news that Yemen’s President Abedrabbo Mansour Hadi was rushed to a “secure location” after a warplane attacked his presidential complex.
Yemen borders major oil producer Saudi Arabia, which on Wednesday launched strikes against Huthi rebels in a bid to help save Yemen’s embattled leader as the country teetered on the brink of civil war.
Yemen has been gripped by growing turmoil since the Shiite rebels launched a power grab in Sanaa in February.
“The geopolitical tensions in Yemen are pushing prices higher,” Daniel Ang, an investment analyst with Phillip Futures in Singapore, told Agence France-Presse.
“Yemen is not a big producer but it is a trade hub in the region so tensions over there could cause a disruption in the trading activities for energy products.”
Singapore’s United Overseas Bank said the market is concerned that “political instability in Yemen could threaten key Middle Eastern petroleum producers.”
The turmoil has overshadowed the effect of rising US crude supplies, which added another 8.2 million barrels in the week ending March 20, analysts said.
World oil prices have collapsed by about 60 percent since June, with strong US production exacerbating elevated output by the OPEC cartel.