LONDON: Brent crude looked set to finish the week near 2015 highs on Friday as air strikes in Yemen stoked concerns over the security of Middle East oil shipments.
A softer US dollar and strong economic indicators in Europe and Asia also lent support to oil prices, which have surged by nearly $10 a barrel this month amid rising tension in the Middle East and slowing US production growth.
Brent crude for June delivery was up 60 cents at $65.45 a barrel by 0944 GMT, having touched its highest since Dec. 10 at $65.69 earlier in the day.
The benchmark settled up $2.12 on Thursday.
US crude for June delivery fell 10 cents to $57.64 a barrel, after settling up $1.58. The front-month contract hit a 2015 high of $58.41 on Thursday and is on course for its sixth straight weekly gain.
The rise in futures over the last month shows a growing disconnect between oil producers and Wall Street over when slumping oil prices will recover, with the financial community betting that the oil price cycle may turn more quickly than the industry expects. "Equity markets are already looking for the upside," said Scott Key, chief executive of IHS.
Meanwhile, many analysts say the market balance does not support the recent price gains, and some producers are bracing for oil to remain at about $60 for as long as the next five years or so.
"It's not quite a bright picture from the fundamentals side," said Eugen Weinberg of Commerzbank, pointing to high inventories in the United States and strong production from OPEC nations.
"The hard facts are rather speaking for low prices." The world's biggest oil exporters in OPEC are pumping almost 2 million barrels per day more crude than required, the highest surplus for at least a decade, data from Reuters, top forecasters and energy agencies shows.
Thursday's spike in prices came as warplanes from a Saudi-led coalition pounded Houthi militiamen and military bases with at least 20 air strikes throughout Yemen, despite Riyadh saying earlier it was winding down its campaign.
On Friday, Societe Generale raised its 2015 average price forecast for Brent by $4.33 to $59.54 a barrel and for US crude by $4.28 to $53.62 a barrel.
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