Oil rises as concerns over Houthi attacks on Saudi Arabia eclipse supply recovery

Fatemeh Bahrami | Anadolu | Getty Images

Oil rose Wednesday as attacks by Yemen's Iran-backed Houthis on Saudi Arabia raised concerns over crude flows from the Middle East even as supplies have been recovering.

Futures for international benchmark Brent crude for December delivery gained 0.93% at $101.52 a barrel. U.S. West Texas Intermediate futures for November advanced 0.81% at $90.16 per barrel.

Oil pumped through the East-West Pipeline had reached 5.8 million barrels as of Tuesday morning, according to Saudi Energy Minister Prince Abdulaziz bin Salman.

However, concerns that there may be further supply disruptions in the Middle East weigh on sentiment. The Saudi aviation authority reportedly said Tuesday that the country's airports in Jazan and Najran were targeted in two attacks, amid growing hostilities between Yemen's Iran-backed Houthis and the kingdom.

Iran's move to step up attacks on tankers which are transiting through the Strait of Hormuz has also led to renewed worries over oil supplies among traders, as it threatens to disrupt the fragile rebound in oil exports through the crucial waterway.

Naeem Aslam, chief investment officer of Zaye Capital Markets, said Tuesday that oil remains "caught between improving physical supply and persistent geopolitical risk."

"The sustained ability of the Houthis in Yemen to target oil facilities hundreds of kilometers from the border keeps the risks of a renewed large-scale crude supply disruption present and high, and these risks could worsen if the Houthis feel the need to apply more pressure as a result of losing more territory," said Samer Hasn, senior market analyst at forex trading platform XS.com.