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.