NEW YORK, (Reuters):
OIL PRICES raced more than US$1 higher yesterday as signals that al Qaeda was behind last week's bombings in Madrid raised fears of future attacks that could disrupt energy supplies.
U.S. light crude prices settled up US$1.25 at US$37.44 a barrel, flirting with a one-year high hit last week.
London Brent crude jumped US$1.56 to us$33.80 a barrel, a fresh one-year high.
Evidence that al Qaeda may have had a hand in the Madrid train bombings that killed 200 people and wounded more than 1,400 others triggered worries of more attacks on countries that supported the U.S. war on Iraq.
Spain said Sunday it had a videotape, purportedly from Osama bin Laden's al Qaeda, saying it carried out the attacks to punish Madrid for backing the U.S.-led war on Iraq.
MARKET ASSESSES
"I think there is a better-safe-than-sorry attitude pushing prices up while the market assesses the news," said Mike Fitzpatrick, an analyst at Fimat USA. Energy experts have said an attack on U.S. ally Saudi Arabia, the world's largest oil supplier, could wreak havoc on global oil markets.
The worries over fresh attacks come against the backdrop of rising Chinese demand, low inventories in the United States, and anticipation of a fresh supply cut by producer group OPEC starting April 1.
OPEC controls about half of the world's exported oil and plans to cut a million barrels per day from global supplies to defend prices against an expected seasonal demand downturn in the second quarter.
OPEC-member Nigeria said over the weekend the cartel should raise its reference target price, used to help determine production cuts or increases, above the current band of US$22-$28, adding a voice to that of fellow member Venezuela.
Nigeria wants the issue to be discussed at OPEC's March 31 meeting, the country's oil advisor, Edmund Daukoru, said on the sidelines of a gas conference in Cairo.
