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Oil prices rise in Asian trade
[SINGAPORE] Oil prices rose in Asia Monday, fuelled by sustained unrest in the crude-rich Middle East, while also gaining support on hopes that declining US production will ease a global supply glut, analysts said.
US benchmark West Texas Intermediate for May delivery gained 78 cents to US$56.52 while Brent crude for June gained 77 cents to US$64.22 in late-morning trade.
"Escalating conflicts in Yemen, a drop in the US rig count and weak US inventory data led to benchmark prices making significant gains," said Sanjeev Gupta, head of the Asia-Pacific oil and gas practice at business consultancy firm EY.
Clashes between rebels and pro-government forces, and Saudi-led air strikes, killed at least 85 people in Yemen on Sunday, medics and military sources said.
Yemen is a small crude producer that sits along the Bab al-Mandab Strait, through which about 3.8 million barrels of oil per day are transported.
The country has been gripped by turmoil since Shiite rebels launched a power takeover in Sanaa in February.
Dealers are also reading a drop in US oil rig activity as a sign of a production slowdown that could alleviate global oversupply and push prices up, analysts said.
The latest count by Baker Hughes showed rigs targeting US crude dropped by 26 to 734 last week, Bloomberg News reported.
Oil prices rallied last week on news that US shale output may be on the cusp of easing.
Crude prices collapsed more than 50 per cent between June and January owing to the oversupply and weak demand.