Crude oil rose from a three-month low after an attack on the U.S. Consulate in Jeddah, Saudi Arabia, boosted concern that a revival of terrorist attacks in the
country might threaten oil shipments from the world’s biggest oil
exporter.
Three attackers were killed, and two others wounded and
captured, according to the statement on the state-run Saudi Press
Agency. Oil prices jumped in June after an attack on a housing
compound by militants with suspected al-Qaeda links. The number
of attacks fell this summer as the police conducted a crackdown
and al-Qaeda supporters took advantage of an amnesty.
“Terrorist attacks appeared to drop off a great deal since
the early summer but that calm appears to be over,” said Bill
O’Grady, director of fundamental futures research at A.G. Edwards
& Sons Inc. in St. Louis. “It shows that al-Qaeda in Saudi
Arabia isn’t dead.”
Crude oil for January delivery rose 61 cents, or 1.4 percent, to $43.15 a barrel at 10:25 a.m. on the New York Mercantile Exchange. Oil has declined 22 percent from a record of $55.67 on Oct. 25. Prices were 40 percent higher than a year ago.
In London, the January Brent crude-oil futures contract rose
57 cents, or 1.5 percent, to $39.93 a barrel on the International
Petroleum Exchange. Brent futures have declined 23 percent since
reaching $51.95 on Oct. 27, the highest since the contract began
in 1988.
Reports of surging U.S. crude oil and petroleum-product
inventories helped push prices lower last week. Oil in New York
plunged 14 percent last week, the biggest weekly decline since
March 2003, when U.S.-led forces invaded Iraq.
OPEC Production
Crude-oil production by the Organization of Petroleum
Exporting Countries fell in November, the first decline in seven
months, as Iraqi output dropped, a Bloomberg survey showed.
Production by all 11 OPEC members fell 570,000 barrels, or
1.9 percent, to an average 29.97 million barrels a day, according
to the survey of oil companies, producers and analysts. OPEC
pumped a revised 30.54 million barrels a day in October, the
highest rate since December 1979, according to figures from the
U.S. Energy Department.
Saudi Arabia reduced daily production by 60,000 barrels to
9.72 million barrels, the first decline in seven months. In
October Saudi output was the highest since Aug. 1981, according
to Energy Department figures.
OPEC should consider cutting production to end a slide in
prices that has seen the group’s daily crude revenue decline
close to 25 percent in six weeks, Kuwait’s oil minister said on
Dec. 4. OPEC meets in Cairo on Dec. 10 to discuss production for
the first quarter of 2005.