RIYADH/SAN’AA – Oil price hike up to 5 percent as Saudi Arabia along with its allies jumps into middle east war, PakistanTribe reported.
Middle east war may trigger at bigger level as the gulf countries have launched airstrike against rebellion group which will, for sure, disrupt the oil supply to the outer world.
Joseph Posillico, senior vice president of energy futures at Jefferies in New York, commenting on the situation said “You do not want to be short oil when there are stories about bombings next door to Saudi Arabia, even if it’s the Saudis who are leading the charge.”
“But with shorts squeezed out of the market, particularly those under $50 WTI, we are reassessing where to go. I personally don’t think this rally has legs as fundamentally nothing’s changed,” he added.
Prices changed as the Brent crude (international) rises $2.36 to $58.84 a barrel whereas the US benchmark rises $1.62 to $50.83.
It is worth mentioning that Yemen produces roughly 130,000 barrels oil a day and the geographically country is located at the ‘Bab el-Mandab Strait, a key choke-point in international shipping.
According to data given by Energy Information Association (EIA), “about 3.8 million barrels of oil a day passed through Bab el-Mandeb in 2013, and a closure of the Strait would keep tankers in the Persian Gulf from reaching the Suez Canal and the SUMED Pipeline aka Suez Mediterranean pipeline, forcing them around the tip of Africa.”
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