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Oil prices jumped 2% on Thursday as tensions in the Middle East grew, with a Saudi-led coalition launching air strikes in retaliation for recent attacks on its oil infrastructure.
Brent crude futures were up $1.53, or 2.1%, at $73.30 a barrel by 11:58 a.m. (1558 GMT); it touched its highest level in three weeks. U.S. West Texas Intermediate (WTI) crude futures gained $1.35, or 2.2%, to $63.37 a barrel.
The Saudi-led military coalition in Yemen carried out several air strikes on the Houthi-held capital Sanaa on Thursday after the Iranian-aligned movement claimed responsibility for drone attacks on two Saudi oil pumping stations earlier in the week.
“You have a sizable strike on Iran-aligned Houthi forces in Yemen today, so until there’s some kind of stepback from that situation, this market is going to have a tough time trading lower,” said Mizuho director of futures Bob Yawger. “There’s just a lot of political risk in this market.”
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