Crude
oil prices settled up 3 per cent, hitting 2015 highs, while US 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 US 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 per cent against the greenback, boosting oil demand from holders of the European currency.
US crude settled up $US1.58, or 2.8 per cent, at $US58.02 a barrel. Its session peak of $US58.41 was a 2015 high.
Oil buyers also stoked the rally with bets that US 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 per cent against the greenback, boosting oil demand from holders of the European currency.
US crude settled up $US1.58, or 2.8 per cent, at $US58.02 a barrel. Its session peak of $US58.41 was a 2015 high.
Money story. Reuters
UK
North Sea Brent, a global benchmark for oil, finished up $US2.12, or
3.3 per cent, at $US64.85 a barrel. Its session high was a 2015 peak of
$US65.58.
Front-month US gasoline settled up 7 cents, or 4 per cent, after hitting an intraday high above $US2 a gallon, the peak since November 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 US 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.
Front-month US gasoline settled up 7 cents, or 4 per cent, after hitting an intraday high above $US2 a gallon, the peak since November 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 US 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.
Warplanes
from a Saudi-led coalition pounded Houthi militiamen and military bases
in Yemen, residents said, two days after Riyadh announced it was ending
the blitz.
The Bab el-Mandeb Strait on Yemen's southern coast controls access to the Red Sea, Suez Canal and the ports of western Saudi Arabia, the world's biggest crude exporter.
US oil production notched its third weekly decline in four weeks, the US Energy Information Administration said.
Oil prices have risen as much as $US10 this month due to worries about Middle East supplies and signs of stronger global demand, particularly for automotive fuels.
The Bab el-Mandeb Strait on Yemen's southern coast controls access to the Red Sea, Suez Canal and the ports of western Saudi Arabia, the world's biggest crude exporter.
US oil production notched its third weekly decline in four weeks, the US Energy Information Administration said.
Oil prices have risen as much as $US10 this month due to worries about Middle East supplies and signs of stronger global demand, particularly for automotive fuels.
But
so far, world supplies of crude are still in a glut. Latest estimates
put production by the Organisation of the Petroleum Exporting Countries
at almost 2 million barrels per day above demand for its oil in the
first half.
US government data on Wednesday showed domestic crude stockpiles rose by 5.3 million barrels last week, well above a forecast 2.9 million barrels, to a record 489 million barrels.
US government data on Wednesday showed domestic crude stockpiles rose by 5.3 million barrels last week, well above a forecast 2.9 million barrels, to a record 489 million barrels.
Reuters
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