Gas Crunch Special report:
Gas Crunch +Full coverage
Oil skyrockets more than $2 after Saudi attack
Crude ends near $63 following failed Saudi refinery car bomb attempt; other geopolitical concerns also send price higher.

NEW YORK ( - Oil prices soared Friday, nearly reaching $63 a barrel, after attackers tried to blow up a Saudi oil refinery, making an already tense geopolitical situation even more so.

U.S. light crude for April delivery jumped $2.37, or roughly 3 percent, to trade at $62.91 a barrel on the New York Mercantile Exchange.

Ready for $262/barrel oil?
Two of the world's most successful investors say oil will be in short supply in the coming months.(Full story.)

"Besides the already full dance card around the Arab world, now you've got this going on," said Mike Fitzpatrick, vice president of energy risk management at Fimat. "It certainly ignites in people's minds that this situation is going to get worse before it gets better."

Saudi security forces Friday thwarted an attempted suicide car bombing at an oil processing facility in eastern Saudi Arabia, Saudi security sources told CNN.

Three Saudi security forces were killed and 10 were injured after they opened fire on three cars believed to have been carrying suicide bombers, Saudi security official Nawaf Obaid told CNN.

The cars had forced their way through an initial entrance to the Abqaiq plant and were met with gunfire between the first and second security perimeters, Obaid said.

The gunfire is believed to have caused two of the vehicles to detonate before they could enter the facility, he said.

It was not clear what happened to the third car, although Saudi officials said none of the cars entered the facility.

All of the would-be attackers were killed, although it was not clear how many people were inside the two vehicles when they detonated.

Obaid said the incident happened more than a half-mile from the facility's inner core of security.

Al Qaeda leaders have previously called for attacks on oil fields in Saudi Arabia, a key U.S. ally.

Most Saudi oil is exported from the Gulf via the huge Abqaiq producing, pumping and processing facility, Reuters reported. The world's biggest processing plant, it handles about two-thirds of the country's output.

Former Middle East CIA field officer Robert Baer has described Abqaiq as "the most vulnerable point and most spectacular target in the Saudi oil system."

"It's not clear what damage there is, but Abqaiq is the world's most important oil facility," Gary Ross, CEO at PIRA Energy consultancy in New York, told Reuters.

"This just emphasizes fears over global oil supply security when we're already facing major ongoing risks in Nigeria, Iran and Iraq."

Attacks on Nigeria's oil network have already forced Shell to cut output by 455,000 barrels per day (bpd), shutting in a fifth of the country's exports. Militants holding foreign oil workers hostage say they will continue attacks in the next few days.

But oil's upside may be limited by brimming U.S. fuel tanks. Gasoline stocks increased to 225.6 million barrels, the highest level in seven years, according to weekly data released Thursday. Crude stocks increased 1.1 million barrels to 326.7 million barrels, also the high end of the average range for this time of year.

"The market is being tugged by two forces -- data are pulling it down and political forces are pulling it up," independent oil consultant Geoff Pyne told Reuters.

Outages in Nigeria, the world's eighth-largest crude exporter, have helped push London Brent crude close to parity versus U.S. West Texas Intermediate (WTI) futures.

U.S. crude usually trades at a premium to Brent, but the London benchmark better reflects the Nigerian risk premium as it is used to price West African oil sales.

Aside from tension in Nigeria and Saudi Arabia, traders said Iran's nuclear ambitions and the possible ramifications for the nation's oil production also remain a worry.

The board of the International Atomic Energy Agency (IAEA) meets March 6 to discuss the next step in resolving Iran's nuclear row with the West.

And Iraq, which has been struggling to get oil output back to pre-war levels, is suffering the worst sectarian violence since the fall of Saddam Hussein, compounding the geopolitical risks in the Middle East.

-- from staff and wire reports


Bush advisers urge veto of bill that would change oil company tax breaks. Click here for more. Top of page

Follow the news that matters to you. Create your own alert to be notified on topics you're interested in.

Or, visit Popular Alerts for suggestions.
Manage alerts | What is this?