Oil hits 2015 high on Yemen worry; U.S. gasoline at Nov peaks

Thu Apr 23, 2015 3:43pm EDT
 
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By Barani Krishnan

NEW YORK (Reuters) - Crude oil prices settled up 3 percent on Thursday, hitting 2015 highs, while U.S. gasoline reached 5-month peaks after Saudi Arabia and its allies maintained a bombing blitz in Yemen that heightened concerns about the security of Middle East oil supplies.

Oil buyers also stoked the rally with bets that U.S. crude output will shrink further after two straight weeks of declines.

The weak dollar also supported oil and other dollar-denominated commodities. The euro gained more than 1 percent against the greenback, boosting oil demand from holders of the European currency.

U.S. crude settled up $1.58, or 2.8 percent, at $58.02 a barrel. Its session peak of $58.41 was a 2015 high.

U.K. North Sea Brent, a global benchmark for oil, finished up $2.12, or 3.3 percent, at $64.85 a barrel. Its session high was a 2015 peak of $65.58.

Front-month U.S. gasoline settled up 7 cents, or 4 percent, after hitting an intraday high above $2 a gallon, the peak since Nov. 26.

"The Saudi escalation of its Yemen campaign is producing exactly the kind of geopolitical tensions oil is known to rally for," said Gene McGillian, senior analyst at Tradition Energy, an oil markets advisory in Stamford, Connecticut.

"You also have the assumption that U.S. production will continue to decline from cutbacks in oil rigs count and exploration expenditure, though I'm not too much of a believer in such improving fundamentals," he said.   Continued...

 
Oil pump jacks are seen next to a strawberry field in Oxnard, California February 24, 2015. REUTERS/Lucy Nicholson