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Crude oil rises after saudi attack Original Source Link: (May no longer be active)
http://quote.bloomberg.com/apps/news?pid=71000001&refer=top_world_news&sid=aduLcWjbJPLAhttp://quote.bloomberg.com/apps/news?pid=71000001&refer=top_world_news&sid=aduLcWjbJPLA
Crude Oil Rises After Saudi Attack Raises Concern About Supply
June 1 (Bloomberg) -- Crude oil rose as much as 2.3 percent in New York on concern terrorists may strike oil installations, after the third attack in a month against foreigners killed 22 last weekend in Saudi Arabia, the world's largest exporter.
On its first day of trading since the attack in Khobar, crude oil for July delivery rose as much as 92 cents to $40.80 a barrel in after-hours electronic trading on the New York Mercantile Exchange, the world's biggest energy market. The exchange was closed yesterday for a holiday.
Police are hunting for three of the four gunmen from the attack that ended Sunday as security forces stormed a housing compound for foreign workers and rescued 25 hostages. The U.S. advised its citizens to leave the country and the U.K. said Britons should avoid non-essential travel there, which could rob the Saudi oil industry of technical and managerial support.
``Oil production has become a target -- this should be cause for worry,'' Alan Viergutz, chairman of oil services company Grupo Centec and former president of Venezuela's Petroleum Chamber, said in an e-mailed response to questions on risks to Saudi supply after the attack. ``The `terror factor' has been taken into account.''
Crude for July in New York traded at $40.50 at 11:46 a.m. Sydney time. Crude prices have risen 37 percent in the past year, partly because of attacks in Iraq and Saudi Arabia in the past two months. The exchange was shut for the Memorial Day holiday yesterday.
Saudi Loading
On Sunday, Saudi Aramco, the world's largest oil company by output, said it is loading oil tankers and exporting crude as normal after Saturday's attacks on residential and office compounds in the city of Khobar.
The Saudi Arabian oil ministry also said the attacks won't derail plans to boost production to 9 million barrels a day this month. The country pumped 8.35 million a day in April, according to Bloomberg estimates.
About 100,000 Westerners, mainly U.S. and U.K. citizens, live in Saudi Arabia, working in the oil and other industries. Saudi Arabia's King Fahd condemned the weekend attack, for which Al-Qaeda has claimed responsibility, and said his country will fight the ``blight'' of terrorism.
``Every citizen, male and female is recruited to serve the country in combating this blight,'' the official Saudi Press Agency cited the King as telling a cabinet meeting yesterday. ``Every official is considered a soldier.''
`Wreaking Havoc'
Terrorists ``have no aim other than wreaking havoc in the earth,'' the King, who is in his 80s, told the meeting. The attack at Khobar won't harm Saudi Arabia's unity or its fight against extremists, he said.
The Organization of Petroleum Exporting Countries, which meets Thursday in Beirut, is concerned about the attacks and plans to raise output to stem price gains, President Purnomo Yusgiantoro said yesterday.
OPEC ``is increasing oil output in the areas where this supply disruption fear is occurring anyway so it pretty much negates the effect,'' said Daniel Hynes, an industrial analyst at Australia & New Zealand Banking Group Ltd. in Melbourne. ``I'm starting to think that $40 is the price we're going to see for quite a while.''
Prices reached $41.85 a barrel on May 17, the highest since futures began trading on the exchange in 1983. On May 21, Saudi Arabia announced an increase in output and proposed that OPEC boost its production target by at least 2 million barrels a day, or 8.5 percent.
Terror Effect
Crude oil futures in New York rose 2.2 percent on Monday, May 3, the first trading session after gunmen killed five employees of Swiss engineering company ABB Ltd. at an oil refinery in the town of Yanbu. The other attack in the past month is the killing of a German on May 22 in Riyadh.
The al-Qaeda terrorist group said it carried out the attacks in Saudi Arabia at the weekend that killed 22 people, Agence France-Presse reported yesterday, citing a statement on an Islamist website at http//alsaha.fares.net. The authenticity of the statement could not be immediately verified, AFP said.
The risk premium in the price of oil ``could go further if this turns out to be the beginning of an al-Qaeda strategy to go after oil assets,'' Alex Carmichael, a Singapore-based director of risk management company RiskMetrics Group, said before trading began. ``I don't think it's out of the realm of possibility that a refinery may be hit.''
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