Yemen unrest pushes crude prices to $116 on supply fears
23 Mar 2011
Brent crude was up 0.6 per cent today, consolidating gains above $116, as unrest intensified in Yemen highlighting security risks to Arabian peninsula oil output. The Arabian peninsula is home to the world's biggest oil fields.
May Brent was up 70 cents to $116.40 a barrel and was up 47 cents at $116.17 by 0253 GMT.
Meanwhile, the president of Yemen said his country would descend into civil war if he were forced to quit and Washington voiced concern over instability in the country which was used by Al Qaeda to launch attacks on Saudi Arabia.
According to analysts, the market was still very vulnerable to further supply disruptions and people were quite nervous about the spread of the unrest to Saudi Arabia.
Yesterday thousands of Yemeni protestors came on to the streets demanding that president Ali Abdullah Saleh step down. There have already been a number of defections to the opposition by several top officials.
Yemen lies along the southern end of the Red Sea. The crude-exporting country overlooks a key shipping lane for oil trade between the Mideast Gulf and Europe.
Neighbouring Saudi Arabia is the only OPEC member country that boasts enough spare capacity to offset further disruptions to output from medium-sized producers like Libya, which has seen exports grind to a virtual standstill in the midst of the country's civil war.
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