Brent crude hits more than five-month high on concern over Middle East escalation

Oil prices rose on Friday, with Brent crude touching a more than five-month high, after Houthi attacks in Saudi Arabia stoked concern over further disruption to energy supplies from the Middle East. Brent crude futures gained $1. 40, or 1. 2 per cent, to $114. 57 a barrel by 1138 GMT (4:38pm PKT), having earlier reached $115 for the highest level since May 4. US West Texas Intermediate crude gained $1. 48, or 1. 5pc, to $100. 95. The Brent benchmark is on track for a third consecutive weekly gain, of 4. 2pc, while WTI is poised to finish 0. 5pc down on the week. Saudi Aramco on Thursday ordered the evacuation of its headquarters in Dhahran on the Gulf near Bahrain, Reuters reported, as fighting intensified between the world’s largest crude exporter and Yemen-based Houthis.

“The market remains concerned about a potential escalation, which, in a worst-case scenario, could trigger renewed supply disruptions,” said UBS analyst Giovanni Staunovo, adding that volatile oil flows and elevated freight rates have left the market undersupplied. Clashes between the Houthis and a Saudi-led coalition that backs Yemen’s internationally recognised government have raged since the Houthis pushed towards Bab el-Mandab , a shipping chokepoint at the mouth of the Red Sea. “The key factors to monitor now are the extent of actual disruption and the time needed to restore operations, as these will ultimately determine how much of a supply risk premium the market is willing to pay,” said XS. com analyst Linh Tran. “If attacks persist and delay deliveries, elevated prices will have a firmer foundation. ” An oil spill from a tanker was detected off the coast of Umm Al Quwain, prompting containment operations and environmental…