US crude oil surged to end sharply higher on Thursday, after the dollar weakened against a basket of few select currencies on some soft economic data from the US Crude prices were also impacted after renewed violence reported in Yemen, where a proxy fight between Iran and Saudi Arabia threatens to destabilize the region.

Meanwhile, evidence of record US crude supplies did little to change oil prices. On the other hand, crude oil made gains even as gasoline stocks showed a surprise draw-down in US inventories.

Reports of renewed violence in Yemen has also contributed to hike in crude prices. After having announced a halt to air strikes against Iran-backed Houthi rebels on Tuesday, Saudi Arabia is reported to have launched fresh aerial strikes, with at least 20 attacks throughout Yemen.

On Wednesday, crude oil dropped USD0.45 or 0.8%, to settle at USD56.16 a barrel, after the weekly oil inventory report from the US Energy Information Administration showed stockpiles to have increased much more than expected last week, although pared much of the losses as gasoline stockpiles declined more than expected with US output dwindling further.