Reax to oil prices jumping by more than $2 per barrel

(24 Feb 2006)
1. Wide shot trading floor New York Mercantile Exchange, zoom in to traders in oil trading pit
2. SOUNDBITE: (English) Ira Eckstein, Area International Trading Corporation:
"Any kind of attempted attack, or, just to show how vulnerable the world oil market is, we're definitely reacting. Crude oil is, you know, over two dollars higher early in the session."
3. Oil traders
4. SOUNDBITE: (English) Ira Eckstein, Area International Trading Corporation:
(Question: How sensitive is the market to the possibility of terror attacks on Saudi oil infrastructure?)
"Extremely. For us to be up two dollars in an attempted attack, imagine if something really did go through, we could be up five, ten dollars, so, you know, Saudi Arabia's the biggest producer in the world, and you know, they actually said there's no supply disruptions to any of their refineries, the oil is flowing, and we're up two dollars."
5. Oil traders
STORYLINE:
Crude oil futures jumped by more than 2 US dollars a barrel after a thwarted attack on a massive oil facility in Saudi Arabia rattled a market already jittery about supply disruptions in Nigeria and Iran's nuclear ambitions.
Saudi Arabia is the world's largest oil producer, with an output of about 9.5 (m) million barrels per day, or 11 percent of global consumption.
The target of the attack, the Abqaiq oil complex in eastern Saudi Arabia, processes about two-thirds of the country's oil before it is exported.
Suicide bombers in cars packed with explosives attacked the heavily guarded facility, but were foiled when guards opened fire, detonating at least one vehicle and killing all the attackers, officials said.
The Saudi oil minister said the attack did not affect operations.
While terror attacks are not new to Saudi Arabia - there were two highly publicised attacks against oil company offices and employee-compounds in the spring of 2004 - analysts said Friday's action was noteworthy because of how close the perpetrators came to a facility that is integral to the flow of oil.
Light sweet crude for April delivery soared to to 62.60 US dollars a barrel in afternoon trade, an increase of 2.06 US dollars on the New York Mercantile Exchange.
Brent crude futures for April jumped 1.81 US dollars to 62.35 US dollars on London's ICE Futures exchange.
Aside from its total output, Saudi Arabia is critical to the global market because it is the only country with significant spare production capacity.
If necessary, Saudi Arabia says it could quickly boost production by 1.5 (m) million barrels a day.
By contrast, there is no other country that can add meaningful output to offset an unexpected disruption, analysts said.
Nymex gasoline advanced by more than 4 cents to 1.550 US dollars a gallon, while heating oil gained 5 cents to 1.72 US dollars a gallon.
Natural gas futures rose 2 cents to 7.48 US dollars per 1,000 cubic feet.
Oil prices had already started the day higher as persistent concerns over Nigerian supply disruptions and Iran's nuclear programme overshadowed US government data showing gains in domestic crude supplies.
Oil prices spiked earlier in the week on news that Nigerian militants had attacked a pipeline switching station operated by Royal Dutch Shell PLC and a boat they claimed housed Nigerian military personnel.
That, and an earlier attack, has forced Shell to halt the flow of about 455,000 barrels a day.

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