Oil erased losses to rise for a fifth day in New York as Saudi Arabia said it started bombing rebel targets in Yemen with its allies.
Futures gained as much as 1.4 percent to trade near $50 a barrel, the highest intraday price since March 10. King Salman ordered the airstrikes against Shiite Houthi positions after an “appeal” from Yemen’s President Abdurabuh Mansur Hadi, Saudi Ambassador Adel al-Jubair said in Washington. Prices slid earlier on Thursday after a U.S. government report showed crude inventories and production swelling further last week to the most in more than three decades.
While the expanding glut of U.S. oil and OPEC’s decision to maintain supplies has driven prices to the lowest in six years, the Saudi bombings bring attention back to unrest in the Middle East and the potential for a disruption to shipments from the world’s largest producing region. Yemen’s location at the Bab el-Mandab, a key chokepoint in international shipping, makes it important for energy trade, according to the U.S. government.
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