NEW YORK, April 16 (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 <CL-LCO1=R> 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.
Oil prices pulled back earlier on Thursday when OPEC said in its monthly report that its own output surged by 810,000 barrels per day (bpd) in March, even as low prices start to weigh on U.S. production.
Crude futures surged on Wednesday, with U.S. crude up nearly 6 percent, following government data showing the smallest weekly inventory build since the week ending Jan. 2, suggesting that months of oversupply may be starting to ease.
Wednesday's bearish U.S. inventory data followed reports earlier in the week indicating production in the United States, including in shale play powerhouse North Dakota, was beginning to pull back as the price retreat since June weighs on producers.
Talks between OPEC and other major producers triggered speculation about deals to cut production and supported oil prices on Wednesday, though most analysts said an agreement was unlikely.
Reuters technical analyst Wang Tao told Reuters Global Oil Forum that Brent could rise towards $70 a barrel in the near term, but that a sharp downturn could happen after that.
(Additional reporting by Christopher Johnson in London and Henning Gloystein in Singapore; Editing by Marguerita Choy and Diane Craft)
Copyright 2017 Thomson Reuters. Click for Restrictions.
WHAT DO YOU THINK?
Click on the button below to add a comment.
Generated by readers, the comments included herein do not reflect the views and opinions of Rigzone. All comments are subject to editorial review. Off-topic, inappropriate or insulting comments will be removed.
Most Popular Articles
From the Career Center
Jobs that may interest you