Baker Hughes rallies as Houthi attacks on Saudi Arabia lift oil

Why did Baker Hughes and oil rise on Friday?

Baker Hughes (Nasdaq: BKR), an oilfield services company, gained 4.2% on Friday, Oct. 23. The shares closed at $55.86. The move added $2.2 billion to the company's stock market value.

Why it matters: Oil prices settled at their highest level since late April, according to reports. Brent crude, the global benchmark, and West Texas Intermediate, the U.S. benchmark, both closed higher. The energy sector fund (XLE) jumped 2.6%.

By the numbers: The wider market moved the other way. The S&P 500, the index behind many retirement-plan funds, fell 0.5%. The Dow slid 1.2%.

Why did oil prices rise?

Fighting between Saudi Arabia and Yemen-based Houthis intensified, according to reports. Saudi Arabia is the world's largest crude exporter. Any threat to its energy facilities can raise fears that supply might be cut.

Saudi Aramco, the state oil company, ordered the evacuation of its Dhahran headquarters on Thursday. The clashes escalated last month, after the Iran-aligned Houthis pushed toward the Bab el-Mandeb Strait. That narrow passage is a key shipping route into the Red Sea.

The United Arab Emirates also reported an oil spill off Umm Al Quwain. The tanker involved has not been identified.

Why did Phillips 66 fall while Baker Hughes rose?

Oilfield services companies sell equipment and expertise to drillers. Higher crude prices may make new drilling more attractive, which could lift demand for that work over time. Refiners such as Phillips 66 (NYSE: PSX) buy crude to make fuel, so pricier crude can raise their costs.

Phillips 66 (PSX) fell 0.5%. The Department of Energy authorized an emergency exchange of oil from the Strategic Petroleum Reserve to address a disruption at the company's Lake Charles refinery. The reserve was already at a historically low level, according to reports.

Even after Friday's gain, Baker Hughes shares stayed 19.8% below their 52-week high, the highest price of the past year. The company also reported Friday that the U.S. oil and gas rig count held steady for the week ended Oct. 23. Rig counts are an early signal of future U.S. output.

What could higher oil mean for the midterms and what comes next?

What’s next: Rising fuel prices are drawing political attention before the midterm elections. Reports describe them as a headwind for President Trump.

Fuel expert Patrick De Haan said earlier this week that gasoline and diesel prices may stay high before the midterms. He said that could happen without clear de-escalation between the U.S. and Iran and between Ukraine and Russia. Helima Croft, head of global commodity strategy at RBC Capital Markets, told CNBC there is a "significant risk post-midterm" if Trump takes a tougher line on Iran.

The next checkpoints are on the calendar. The Conference Board's consumer confidence survey is due Tuesday, Oct. 27, at 10:00 a.m. ET. The Fed announces its interest-rate decision on Wednesday, Oct. 28. An estimate of third-quarter GDP follows Thursday, Oct. 29, at 8:30 a.m. ET.