Oil prices rise on Saudi bombings

LONDON - Oil prices climbed yesterday after a series of suicide bombings ripped through residential compounds for Westerners in the Saudi capital Riyadh.

By (REUTERS)

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Published: Wed 14 May 2003, 12:17 PM

Last updated: Wed 1 Apr 2015, 9:15 PM

US light crude CLc1 traded 35 cents higher at $27.70 a barrel, while London's Brent crude LCOc1 rose 36 cents to $25.25.

Traders and analysts said any attack in Riyadh was bound to raise anxiety over security of supply from the world's largest oil exporter.

Analysts said Tuesday's gains were tempered by a downbeat signal from the International Energy Agency (IEA), which trimmed its 2003 oil demand forecast in a report published yesterday.

The agency revised down its annual forecast for world oil demand growth by 90,000bpd to 1.03 million because of the impact of the SARS virus on consumption in Asia.

It also said that oil demand in Asia's fastest growing economy, China, would shrink by 5.5 percent in the second quarter on an annual basis because of the SARS epidemic.

The Paris-based agency said it had slashed its demand forecast for China for the second quarter by 340,000 barrels per day to 4.95 million bpd as air and road transport fell sharply along with tourism, and economic activity slowed.

More bullishly for the markets, the Paris-based IEA, adviser on energy to 26 industrialised nations, also pointed to a decline in industry stocks, saying they had fallen more sharply than expected as consumers stocked up ahead of war in Iraq.

Commercial oil stocks among Organisation for Economic Cooperation and Development Countries (OECD) shrank by 1.43 million barrels a day to 2.338 billion barrels in the first quarter.

The decline left a 260-million-barrel, or 10 percent, deficit versus a year ago and compared to an average first-quarter draw of 280,000 bpd in the previous five years.



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