Yemen worries boost oil prices

Multilateral military operations in a collapsing Yemen injected a layer of risk to global oil markets, pushing crude oil prices up 2 percent Thursday.

The Saudi government announced it was leading military operations, dubbed Decisive Storm, with its Arab allies "in order to defend the legitimate government in Yemen and prevent the Houthi militias from controlling the country by force."

The Houthi militia, a Shiite group, has in recent weeks put pressure on the administration of President Abd Rabbuh Mansur Hadi. U.S. forces are providing assistance to their Saudi counterparts against the Houthi movement, which is said to have tacit support from Iran.

The Houthi uprising escalated last year in Yemen. In November, Norwegian energy company DNO International declared force majeure in Yemen, meaning it was freed from contractual obligations because of circumstances beyond its control, out of security concerns.

Jamie Webster, a research director at IHS Energy, told UPI in response to email questions the multilateral aspect of the recent conflict adds a new level of concern in the oil-rich Middle East.

"The risk of this going regional, and impacting oil markets, is small, but the impact of that would be enormous," he said. "This is what is driving up the price [of oil]."

The price for West Texas Intermediate crude oil, the U.S. benchmark, was up 2.25 percent from the previous day to move back above the $50 mark. The price for Brent, the global benchmark, was up 2.2 percent to $57.72 per barrel.

Yemen is an oil producer, though much of the regional security concerns may stem from maritime traffic through key ports in the region.

Prices were supported further by positive news from the U.S. Labor Department that weekly applications for unemployment assistance fell 9,000 to a seasonally adjusted 282,000