Tensions in Yemen may soon become a big deal to oil
Published: Aug 28, 2015 3:53 p.m. ET
Getty Images
Yemeni men wearing military fatigue in March 2015.
By
MyraP. Saefong
Markets/commodities reporter
Increasing tensions in Yemen could soon provide a sizable boost to oil prices once again.
Saudi Arabian ground troops entered northern territories in Yemen in a move to counter retaliatory attacks by Yemeni forces on Saudi soil, according to a report dated Thursday from Tehran-based Press TV, which cited comments from a military official.
In the case of a widespread Gulf conflict, ‘$40 oil would be missing at least one zero.’
Richard Hastings, Global Hunter Securities
Richard Hastings, macro strategist at Global Hunter Securities, said the news was likely part of the reason for oil’s price jumped on Friday after soaring Thursday.
October crude CLV5, +6.58% rose 6.3% on the New York Mercantile Exchange to settle at $45.22 a barrel. October Brent crude LCOV5, +5.36% on the ICE Futures exchange added 5.2%.
“Yemen would be, from a speculative perspective, the trigger for a much bigger conflict between the Gulf leaders with Saudi alignment, and Iran,” said Hastings. “If that were to unfold, then of course $40 oil would be missing at least one zero.”
Read: Why Yemen has the power to rally oil prices
Oil prices had rallied earlier this year after Saudi Arabia and other Gulf nations launched airstrikes against rebel forces in Yemen.
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CLV5
+2.80 +6.58%
LCOV5
+2.55 +5.36%
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Myra P. Saefong
Myra Saefong is a MarketWatch reporter based in San Francisco. Follow her on Twitter @MktwSaefong.
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