Brent briefly tops $115 – Aramco evacuates Dhahran headquarters

The price of Brent crude rose on Friday to its highest level in more than five months. According to Reuters, a barrel (159 litres) cost 114.99 dollars at around 1300 GMT, up 1.71 dollars or 1.5 percent from the previous day. It touched 115.16 dollars at one point, the highest since 4 May. Brent was thus heading for a weekly gain of 4.4 percent, its third in a row. U.S. West Texas Intermediate rose 1.8 percent to 101.27 dollars but was slightly down for the week. Brent had already gained three to four percent on Thursday, according to the trade publication Rigzone.

According to Reuters, the rise was driven by attacks by Yemen's Houthi militia in Saudi Arabia, which have fuelled fears of further supply disruptions in the Middle East. Oil company Saudi Aramco ordered the evacuation of its headquarters in Dhahran as fighting intensified, Reuters reported. Adding to the pressure were a closed pipeline valve in Libya that cut output at two oilfields and an oil spill off the coast of Umm Al Quwain in the United Arab Emirates, the cause of which the UAE environment ministry did not give. "The market remains concerned about a potential escalation," UBS analyst Giovanni Staunovo said, according to Reuters.

Naeem Aslam of Zaye Capital Markets told Rigzone that further deterioration could push prices towards 120 dollars, while diplomatic progress or weaker demand could bring Brent back to 105 to 110 dollars. Tamas Varga of broker PVM Oil Associates expects reciprocal attacks on energy infrastructure to continue. The rise is particularly sensitive for Europe: according to Claudio Galimberti of research firm Rystad Energy, high energy prices hit China and Europe harder than the United States, which is itself a major oil and gas producer.