Oil prices have reached their highest point in weeks as Houthi rebels in Yemen battle for control of the strategic city of Aden. The southern port is a key stop on the supply chain of oil to customers in Europe.
Oil prices continued to rise for a second day as Saudi Arabia and its allies launch strikes on Yemen. Crude oil prices jumped by as much as 6 percent Thursday, as fears grew that a new war was breaking out in a region which much of the world depended on for energy.
The military operations are targeting Houthi rebels who have breached the city of Aden in southern Yemen. Arab oil producers use the Gulf of Aden as part of their route to ship oil to markets in Europe.
Prices for Brent crude rose by over $3 a barrel to near $60, as Egyptian warships entered the Suez Canal headed fro the Gulf of Aden. That is the highest level for oil in over two weeks. Yesterday oil prices jumped by nearly 5 percent.
Though the conflict in Yemen has so far not created any cut offs in oil suppy, analysts are watching oil closely due to its recent impact on the global economy.
Oil prices have plummeted from more than $115 a barrel last summer to as low as $45 in January, and they have become a key factor in driving financial markets and monetary policy.
Lower oil prices have been a boon for consumers whose cost of living costs have declined. But central banks are worried about deflation caused by lower oil prices, which is a danger for growth.
kc/hg (Reuters, dpa)