Oil prices edge up as Yemen concern lingers

Oil prices rose on Wednesday as the Yemen conflict remained a concern despite concerns of a global supply glut

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Oil prices rose on Wednesday as the Yemen conflict remained a concern despite concerns of a global supply glut after industry data showed a build in U.S. crude inventories for the 15th straight week.

Brent crude for June delivery was up 47 cents at $62.55 a barrel by 1321 GMT, after touching an intraday low of $61.39.

U.S. crude for June delivery was up 7 cents to $56.68 a barrel, after reaching a low of $55.73 earlier in the session.

Prices drew support from continued fighting in Yemen, despite Saudi Arabia saying on Tuesday it was ending a month-long campaign against the Iran-allied Houthi rebels. Yemen sits on shipping lanes used to transport oil from the Arab Gulf to Europe via the Suez Canal.

The White House said on Wednesday that Yemen remains unstable and much more work needs to be done in the region.

"We saw that more fighting broke out in Yemen today," said Ole Hansen, head of commodity strategy at Saxo Bank.

"We came into the day with some negative sentiment with the U.S. inventory report looming and news that Saudi had stopped their bombing campaign but this has forced a bit of a rethink in positions," he said.

The American Petroleum Institute (API) said on Tuesday that U.S. crude stocks rose by 5.5 million barrels last week, higher than the 2.9-million-barrel build expected by analysts in a Reuters survey, to a record 480.2 million barrels.

Stocks at the key delivery point of Cushing, Oklahoma rose by 572,000 barrels, the API said. Energy markets intelligence firm Genscape said tanks at Cushing were nearly 80 percent full.

"You have a considerable build in the U.S.," said Olivier Jakob, chief analyst at Swiss-based consultancy Petromatrix.

"There has been a lot of waiting and hoping for the first drop of stocks in Cushing and that has not happened yet," he said.

Official U.S. stocks data will be issued by the government's Energy Information Administration (EIA) at 1430 GMT on Wednesday.

Oil prices had gained nearly $10 a barrel this month on tensions in the Middle East and concerns over slowing output growth in the United States, before starting to drop back.

A new bull market might arrive much sooner than expected given the huge scale of capital and workforce withdrawal in the sector, a former boss of BP said on Wednesday.

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