Oil prices jumped on Friday, after U.S. led air strikes against Houthi rebel targets in Yemen, in retaliation for persistent attacks on ships in the Red Sea, drove fresh jitters over potential supply disruption.
Price moves
-
West Texas Intermediate crude
CL00,
+4.26%
for February delivery
CL.1,
+4.26% CLG24,
+4.26%
jumped $3, or 4.2%, to $75.05 a barrel. Oil closed up 0.9% to settle at $72.02 per barrel on Thursday. -
March Brent crude
BRN00,
+4.12% BRNH24,
+4.12% ,
the global benchmark, rose $3.12, or 4%, to $80.51 a barrel on ICE Futures Europe. The contract rose 0.8% to $77.41 a barrel on Thursday. -
February gasoline
RBG24,
+3.79%
climbed 2.5% to $2.16 a gallon, while February heating oil
HOG24,
+4.05%
rose 3% to $2.75 a gallon. -
Natural gas for February
NGG24,
+0.74%
rose 1.9% to $3.15 per million British thermal units.
Market drivers
U.S. and British forces on Thursday carried out joint strikes on more than a dozen targets in Yemen used by Iranian-backed Houthis, in a bid to deter further attacks on ships in the Red Sea.
Those Houthi rebels, who began their attacks after war broke out between Israel and Gaza last year, launched their biggest yet barrage of missiles and drones at Red Sea shipping vessels this week. The Red Sea links the Middle East and Asia to Europe via the Suez Canal and the narrow Bab el-Mandeb Strait, where an estimated $1 trillion of goods pass through each year.
“With one of the most critical oil supply channels to the West under threat, it is not surprising to see crude prices rising in a dynamic that could create further upside for the price of the barrel should tensions continue to escalate in the Middle East,” said Ricardo Evangelista, senior analyst at ActivTrades.
Nonstop attacks on ships have forced detours to other waterways, such as the Cape of Good Hope in South Africa, but that incurs much longer travel times and higher costs, and many are growing concerned about globally supply chains.
Responding to the strikes, Mohammed Abdul-Salam, the Houthis’ chief negotiator and spokesperson, said the U.S. and Britain were “wrong if they thought that they would deter Yemen from supporting Palestine and Gaza.” Houthi “targeting will continue to affect Israeli ships or those heading to the ports of occupied Palestine,” he wrote online.
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