Oil prices climbed today after a series of suicide bombings ripped through Western residential compounds in the Saudi capital Riyadh. US light crude climbed by 45 cents to $27.80 a barrel, while London's Brent crude rose 42 cents to $25.31.
Traders and analysts said any attack in Riyadh was bound to raise anxiety over security of supply from the world's largest oil exporter. Latest reports said that up to 20 people were killed and more than 160 US and other nationals had been wounded after a series of suicide attacks on foreigners' compounds in Riyadh late last night.
Saudi Arabia is the biggest exporter of crude oil to the world's 77 million barrel-per-day market, with an estimated production capacity of 10.5 million bpd.
Analysts said today's gains were tempered by a downbeat signal from the International Energy Agency (IEA), which trimmed its oil demand forecast for 2003 in a new report.
The agency revised down its annual forecast for world oil demand growth by 90,000 bpd 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% 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.
Analysts still expect the Organisation of the Petroleum Exporting Countries to curb supplies further at a meeting in Qatar on June 11.
OPEC agreed in April to reduce output, fearing a potential price collapse from the eventual return of Iraqi crude to the international market and an uncertain outlook for oil demand as the global economy struggles with anaemic growth.
