Oil turns higher, rallies to 2015 high on Yemen conflict

Thu Apr 16, 2015 3:10pm EDT
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By Robert Gibbons

NEW YORK (Reuters) - Crude oil prices jumped to fresh 2015 peaks on Thursday, turning higher on news that a tribal group made up of former Al Qaeda militants took control of a major southern oil terminal in Yemen.

The terminal is one of the major hubs for the Hadramout region exporting an average of 120,000 to 140,000 barrels per day (bpd) of crude from fields in the area.

While a relatively minor oil producer, Yemen's escalating conflict raises concerns about neighboring top oil exporter Saudi Arabia.

Brent crude for June delivery rose 66 cents to settle at $63.98 a barrel, rallying from a $62.00 low and reaching a 2015 peak for front-month Brent of $64.95.

U.S. May crude rose 32 cents to settle at $56.71, hitting a 2015 high of $57.42 after recovering from a $55.07 intraday low.

Brent's premium to U.S. crude was back above $5 a barrel, now comparing June contracts, after the spread narrowed to $3.34 intraday on Wednesday, the day Brent's May crude contract expired.

"The report on Al Qaeda forces taking over facilities in Yemen sent prices up," said Phil Flynn, analyst at Price Futures Group in Chicago.

The dollar's weakness also provided some lift for dollar-denominated crude oil prices.   Continued...

A worker looks on at the Bashneft-Ufimsky refinery plant (Bashneft - UNPZ) outside Ufa, Bashkortostan, January 29, 2015. REUTERS/Sergei Karpukhin