Oil prices rise Friday impacted by Yemen escalation and possible decline in US output

Oil prices regained ground to surge above $64 on Friday due to the conflict in Yemen and due to the prospect that lower prices are starting to curb U.S. shale output.

Although Yemen is not a major oil producer, the escalation spurs concerns about risks to supply from major exporters in the region such as its neighbor Saudi Arabia.

At 1509 GMT, Brent crude for June was up 25 cents at $64.23 a barrel. It hit a 2015 high of $64.95 on Thursday. U.S. crude for May was down 9 cents at $56.62 a barrel.

A day earlier, Brent crude was within sight of its 2015 high rallying 16 percent in April.

On Friday military units protecting Yemen's largest Masila oilfields withdrew and handed over security responsibilities to armed local tribes, in a sign of the weakening grip of the Yemeni state over its land and resources.

As analysts say, prices also received support from traders closing out short positions on Friday, encouraged by strong technical factors.

Crude also got a lift from signs this week the price drop is starting to slow U.S. production and from a smaller-than-expected rise in U.S. crude inventories that raised hopes months of rising stocks may be nearing an end.

Oil prices have almost halved since June 2014 on ample supplies. The drop deepened after OPEC refused in November to cut its production and instead chose to defend market share against higher-cost producers such as the United States.

The Organization of the Petroleum Exporting Countries (OPEC) said on Thursday in its monthly report that its March production jumped 810,000 barrels per day (bpd) to 30.79 million bpd, led by Saudi Arabia. The news pressured oil prices.

On Wednesday, the International Energy Agency, which advises industrialized countries, also reported a surge in OPEC production to 31 million bpd, which it said could delay a tightening in the global market.

"There is the prospect in the second quarter of an enormous 2.4 to 2.7 million bpd stockbuild if OPEC production continues at 31 million bpd," said David Hufton of brokers PVM.