Oil prices rise as Saudi-Yemen crisis lingers

Oil prices rose as the Saudi-Yemen conflict resumed with bombings raising concern about global oil supply.

Saudi-led coalition warplanes bombed Yemen on Wednesday despite an announcement by Riyadh that it was ending its campaign of air strikes, while renewed fighting erupted on the ground between rebels and forces loyal to the exiled president.

Brent crude for June delivery LCOc1 was up 47 cents at $62.55 a barrel, while the US crude for June delivery CLc1 was up 7 cents to close at $56.68 a barrel.

Saudi Arabia had announced on Tuesday that it was ending a month-long campaign against the Iran-allied Houthi rebels with positive responses from both the White House and Tehran.

But hours later, air strikes and ground fighting resumed and the International Red Cross described the humanitarian situation as “catastrophic”. The rebel Houthi movement said it wanted a return to United Nations peace talks, but only after a complete halt to air strikes.

Yemen sits on shipping lanes used to transport oil from the Arab Gulf to Europe via the Suez Canal.

Oil prices had gained nearly $10 a barrel this month on tensions in the Middle East and concerns over slowing output growth in the United States.