Oil rises as geopolitical tensions rise

Oil prices rose as a new wave of U.S. attacks on Houthi targets in Yemen continued to escalate tensions in the Middle East and raised the prospect of long-term disruptions to global shipping patterns. Global benchmark Brent crude rose above $78 a barrel after closing lower on Wednesday, while U.S. crude was around $73. The U.S. Central Command said the U.S. had struck more than a dozen Houthi missile launchers to repel attacks on shipping by the Iran-backed group. The crisis in Yemen has disrupted trade by cutting traffic through the Red Sea and the Suez Canal, forcing ships to flee the region and take longer, alternative routes. The Biden administration is set to relist the group as a terrorist group. Crude oil took a hit in the opening weeks of the year amid a worsening crisis in the Middle East, as well as concerns that demand growth will slow this year and the Federal Reserve will cut interest rates later than expected. Gao Jian, an analyst at Shandong-based Qisheng Futures Co, said there could be a short-term boost in prices if the situation in the Red Sea escalates. But he said oil has been constrained by weak fundamentals since late last year.