OIL AND GOLD RISE AFTER US, UK STRIKES IN YEMEN

Fri 12 January 2024:

Energy and gold prices surged in early trading Friday after the US and UK carried out joint strikes on military targets associated with Yemen’s Houthi rebel group.

The White House issued a statement late Thursday saying that US and British forces launched the strikes in response to Houthi attacks against commercial ships in the Red Sea.

By 0330GMT, futures prices for global benchmark Brent crude for March delivery had risen by 2.4%, or $2.10, to $79.80 per barrel.

Natural gas futures rose by 2.1% to $3.20 per million British thermal units amid concerns about the impact on energy supplies through the Bab al-Mandab Strait.

The tensions in Yemen also led to a rise in spot gold futures by 0.45%, or $8.60, to $2,037 per ounce.

The joint strikes by the US and UK came in response to ongoing drone and missile attacks by the Yemeni group, which is backed by Iran, on international shipping lanes in the Red Sea that began in November in response to Israel’s war on Gaza.

The Red Sea is a critical waterway for international commerce, particularly for oil and fuel shipments, connecting the Suez Canal in Egypt with the Gulf of Aden via the Bab al-Mandab Strait. The Suez Canal allows ships coming to and from Europe to transit to Asia without having to take the much longer and costlier route around the southern tip of Africa.

The Houthis have carried out 27 attacks in the Red Sea since Nov. 19, the US military said earlier Thursday.

-Source: AA

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