Oil pump jacks in California.

Last Thursday Brent crude oil prices rose by more than a dollar and reached the price of $64 per barrel, this is all due to tensions in the Middle East with civil war breaking out in Yemen. This could be a huge security risk for all of the Middle Eastern supplies, analysts say. Fighterjets took flight and hit Yemen in cities and surrounding areas, including Ibb and Aden; this military action was forced by the Saudi led coalition. This happened despite indications from Riyadh were it was said its campaign against Houthi ( allied with Iran) will be slowed down.

Yemen is a country that produces a very small amount of oil however the Bab el-Mandeb Strait which is on the south coast controls access to the Suez Canal, the Red sea and all of the ports in west Saudi Arabia, which is the world’s largest exporter of crude oil.

In April Brent oil is currently up by $1.37 with a price of $64.10 per barrel, while in the United States crude is up by 78 cents with a price of $56.94 per barrel. Oil prices have sky rocketed this month by over 10$ due to the concerns of security risks towards the supplies that lay in the Middle East and also due to the increased global demand for oil.

“We have all had a huge shift in sentiment from the moment the International Energy Agency came with the last week report which highlighted increase in global demand,” said analyst Richard Mallinson of Energy Aspects. The global market for oil is very much oversupplied, the latest estimates from the organization of Petroleum Exporting Countries shows that every day there are 2 million barrels produced which are over demand, and this is just for the first half of this year.

However the global demand for oil is slowly rising, especially for automotive fuels and there are analysts who predict that the global oil market will be balanced by the beginning of next year. The United States Energy Information Administration stated that the domestic oil production this week has stalled. During an industry conference in Houston which took place this week many executives stated that drilling costs in the U.S. have fallen so much that it has opened a possibility for producers to exploit oilfields which were uncompetitive just a month ago.