Oil prices rise in wake of Saudi blast
Oil prices rise in wake of Saudi blast
Agence France-Presse, London
Oil prices rose on Monday as traders nervously bought up
supplies following a suicide bombing in Saudi Arabia which killed
at least 17 people and injured about 120 more.
The price of Brent North Sea crude oil for December delivery
gained 32 US cents to $29.23 per barrel in early deals.
New York's reference light sweet crude December contract rose
20 cents to $31.05 per barrel in out-of-hours electronic trading.
Traders were wary following the explosion late Saturday which
devastated a housing compound in Riyadh, and which Saudi
officials said bore the hallmarks of al-Qaeda, the terrorist
group headed by Saudi-born Osama bin Laden.
Any terrorist attacks in the world's leading crude producer
were bound to see prices rise, analysts said.
"It is an immediate reaction to the Saudi bombing over the
week-end," said Tony Machacek from Prudential Bache.
"The market is fairly nervous and heavily influenced by the
sort of news linked to an escalation of Middle East violence or
potential terrorism in Saudi Arabia," he said.
"We are not quite sure what it means for the oil sector," he
continued.
"I think that in the cold light of day, the chance of Saudi or
Middle East supplies being affected are probably very slim, but
we just don't know, we cannot be sure.
"So there is some nervous buying, just in case what happened
this weekend develops into something more sinister and escalates
into more Middle East problems."
In Vienna, Opecna, the news agency of the Organization of
Petroleum Exporting Countries, reported Monday that OPEC's
reference "basket" of prices has risen above $28 a barrel,
surpassing its maximum stabilization level.
The agency said the reference price, based on seven varieties
of crude oil, rose to $28.30 on Friday from $27.84 on Thursday.
OPEC in March 2000 approved a stabilization mechanism under
which it agreed to reduce output by 500,000 barrels a day if the
reference price stayed below $22 for 10 working days.
The cartel also pledged to boost production if the price
remained anove $28 a barrel for 20 working days.