NEW YORK, (Reuters) – Oil prices rose on Friday after top exporter Saudi Arabia foiled an Al-Qaeda-linked plot to attack oil facilities, raising worries over the security of world energy supplies.
The news added to expectations that the United States will face a gasoline inventory crunch when drivers hit the roads this summer vacation season, after a slew of refinery outages cut stockpiles 15 percent since early February.
London Brent crude, currently seen as more representative of global oil prices, gained 63 cents to $68.28 a barrel by 1745 GMT. U.S. crude was up $1.05 to $66.11 a barrel.
OPEC kingpin Saudi Arabia said it arrested 170 people suspected in a plot to attack oil facilities and military bases, including some trainee pilots preparing for suicide operations.
“One of their main targets was to carry out suicide attacks against public figures and oil installations and to target military bases inside and outside (the country),” according to a Saudi Interior Ministry statement.
Oil dealers said the news triggered a quick run up in crude prices, after they had opened trading in negative territory.
“We bottomed out around the time the Saudi news hit and we’ve been working our way up since then,” said Eric Wittenauer, analyst at A.G. Edwards in Chicago. “With the geopolitical tension, especially in the producer regions, it’s hard to be short going into the weekend.”
Prices have also been supported by unplanned outages and refinery maintenance in the United States, including a fire Thursday at a key oil refinery in Louisiana operated by Marathon Oil.
Energy experts have said low production from U.S. refineries due to extended downtime could mean the world’s top fuel consumer will face a stockpile crunch during the driving season.
Oil had come under pressure on Thursday after Iran’s chief nuclear negotiator Ali Larijani said Tehran and the European Union had neared unity in some areas of their talks.
A dispute between the West and Iran over its nuclear program has dragged on for nearly a year, propping up oil prices over possible supply disruptions.
“Certainly the improvement of the Iran situation is one of the factors that has helped put some pressure on oil,” said Tetsu Emori, chief strategist at Mitsui Bussan Futures Ltd.
Larijani said on Thursday that Tehran and the EU — due to meet again in two weeks — were nearing “a united view” and that new ideas had been raised to break an impasse.