UPDATE 7-Oil prices rise more than 1% as Middle East conflict persists

*
* Saudi-led coalition in Yemen strikes Sanaa, casualties
reported
* Market shrugs off build in U.S. crude oil inventories
* U.S. coasts face tight gasoline supplies ahead of driving
season
* Weekly changes in U.S. inventories: https://tmsnrt.rs/2XkQF8e

(Updates prices and market activity to settlement, adds analyst
comments)
By Laila Kearney
NEW YORK, May 16 (Reuters) - Oil futures were up more than
1% on Thursday as tensions in the Middle East grew, with a
Saudi-led coalition launching air strikes in retaliation for
recent attacks on its crude infrastructure.
Brent crude futures LCOc1 settled at $72.62 a barrel, up
85 cents, or 1.18%, after touching their highest level in three
weeks. U.S. West Texas Intermediate (WTI) crude
futures CLc1 settled at $62.87 a barrel, gaining 81 cents, or
1.37%, after hitting its strongest level in two weeks.
The Saudi-led military coalition in Yemen carried out
several air strikes on the Houthi-held capital Sanaa on Thursday
after the Iranian-aligned movement claimed responsibility for
drone attacks on two Saudi oil pumping stations earlier in the
week.
Saudi Arabia's deputy defence minister accused Iran of
ordering the drone attack on the pumping stations. It comes
after attacks on four oil tankers off the coast of United Arab
Emirates on Sunday.
Taken together, the escalation of tensions has compounded
fears of lowered supply in the Middle East. U.S. staff were
ordered to leave the American embassy in Baghdad on Wednesday
out of concern about perceived threats from Iran.
"These types of tensions are unlike what we've seen in a
very long time, and I think the market is starting to wake up to
the fact that the risks are getting graver," said Phil Flynn, an
analyst at Price Futures Group in Chicago. "When you've got
shootings at pipelines, you've got drone attacks... the odds for
some type of conflict, or supply disruption, go up."
Iraq's oil minister Thamer Ghadhban said Thursday that
international oil companies have said they are operating as
normal in the country, Iran's direct neighbour.
Asian shippers and refiners have put ships heading to the
Middle East on alert and are expecting a possible rise in marine
insurance premiums after the attacks. "Until there's some kind of stepback from that situation,
this market is going to have a tough time trading lower," said
Mizuho director of futures Bob Yawger.
Tight gasoline supplies and a rally in equities also helped
to boost crude futures, Yawger said. The market still faces uncertainty over whether the
Organization of the Petroleum Exporting Countries (OPEC) and
other producers will continue with supply cuts that have boosted
prices more than 30% so far this year. Ghadhan said the next
meeting of OPEC's joint monitoring committee will assess the
commitment of member and non-member countries to the production
cuts.
OPEC said on Tuesday that world demand for its oil would be
higher than expected this year. <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
TECHNICALS-U.S. oil may rise into $63.06-$63.96 range
oil may gain more to $73.80 crude inventories, weekly changes since 2017 png https://tmsnrt.rs/2XlX17b
Attacks on Saudi Arabia's oil pipeline, ships off UAE's Fujairah
port https://tmsnrt.rs/2WMoAXg
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