Oil prices rose on Friday as Yemen’s Houthi rebels launched another wave of attacks on Saudi Arabia, stoking concerns about further disruption to supplies from the Middle East.
Brent, the benchmark for two thirds of the world's oil, was trading 1.1 per cent higher at $114.50 a barrel at 10.21am UAE time. West Texas Intermediate, the gauge that tracks US crude, climbed 1.3 per cent to $100.80 a barrel.
Brent, which on Thursday settled at its highest level since May 4, is set to close higher for a third successive week, while WTI is on track to finish lower. “Oil prices remain supported by geopolitical risks with Brent futures and WTI ... both holding on to large overnight gains,” said Edward Bell, head of research at MUFG, and Soojin Kim, research analyst at the group.
“Houthi militants claimed an attack on the oil loading port at Yanbu in Saudi Arabia, along with attacks on Aramco facilities and the Dammam airport in the past several days. Production and export flows through the Strait of Hormuz are still holding at close to pre-conflict levels, though at elevated shipping rates.”
Saudi Arabia has faced regular attacks from the Iran-backed Houthis, with the group last month making rapid advances along Yemen's Red Sea coast near the Bab Al Mandeb strait, a key waterway for global crude supplies. The Houthis have claimed attacks on the Saudi Defence Ministry headquarters in Riyadh, King Fahd International Airport in Dammam, an Aramco site in Yanbu and Abha International Airport over the past 48 hours.
Developments in Libya, an Opec member, are also affecting oil prices. Production was curtailed in the country after the closure of an oil pipeline valve connecting Al Zawiya refinery with the Hamada and Tahara oilfields.
People entered the crude receiving station near the refinery and closed the valve, Libya’s National Oil Corporation said in a statement published on Facebook. The pipeline belongs to the Arabian Gulf Oil Company, an NOC subsidiary.
Libya’s crude has been valuable to global markets as supply disruptions continue owing to the effective closure of the Strait of Hormuz. Many European countries import crude from Libya, with the country’s production estimated at about 1.4 million barrels per day.