Prices of Bonny Light, others edge higher
The price of Nigeria’s Bonny Light and other Organisation of Petroleum Exporting Countries (OPEC) basket of 12 crudes stood at $54.55 a barrel yesterday, compared with $50.83 the previous day, according to OPEC Secretariat calculations.
The new OPEC Reference Basket of Crudes (ORB) is made up of the following: Saharan Blend (Algeria), Girassol (Angola), Oriente (Ecuador), Iran Heavy (Islamic Republic of Iran), Basra Light (Iraq), Kuwait Export (Kuwait), Es Sider (Libya), Bonny Light (Nigeria), Qatar Marine (Qatar), Arab Light (Saudi Arabia), Murban (UAE) and Merey (Venezuela).
This increase in prices of crude oil has been attributed to lower United State’s drilling activity and top producer Saudi Arabia going to war with rebels in Yemen.
Oil prices rose sharply amid concerns that fighting in the Arabian Peninsula between a Saudi-led coalition and Houthi rebels in Yemen could disrupt supplies.
While Yemen is a minor-league oil producer, the fact that Saudi Arabia, the country’s northern neighbor and one of the world’s leading oil exporters, had become embroiled in an armed conflict roiled the market, even though analysts said there was very little near-term chance of a disruption in petroleum production.
What might matter more, they said, is the longer-term market impact of rising geopolitical tensions in the Middle East.
“This is a subset of a broader regional conflict, and as it intensifies, the odds of it affecting a major oil producer continue to rise,” said Seth Kleinman, an analyst at Citigroup in London.
Those general jitters could explain why oil prices spiked in early European trading on Thursday after news that Saudi Arabia had bombed targets in Yemen.
The price of West Texas intermediate crude, the main American benchmark, rose about 4.5 percent in morning trading, while Brent crude, the widely used international reference, rose about 4 percent.
In early afternoon trading in New York, the West Texas benchmark was up 4.5 percent on the day, to $51.40, and Brent crude was up 4.9 percent, to $59.27.
Both benchmarks are up more than 10 percent from the multiyear lows they reached in mid-March — although they are still down about 40 percent from their prices a year ago.
“I think it’s a very minimal risk to oil supplies,” said Rachel Ziemba, a Middle East analyst at Roubini Global Economics, a financial research firm, said of the Saudi strikes. “It is important to remember that Yemen is not a major producer; in fact, that there is a Saudi-led operation in Yemen, which has been a failed state for some time, should not be a surprise.”
But Ziemba and other analysts said that the Saudi intervention came as a reminder that geopolitical tensions in the Middle East — still the world’s most important oil producing region — remain high, and appear to be rising. The civil war in Syria is showing little sign of winding down, and parts of Iraq remain conflict zones.
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