Updated from 8:01 a.m. EDT
Oil futures briefly hit $42 a barrel in Tuesday trading after 22 people were killed over the weekend in Khobar, Saudi Arabia, in an attack by suspected al Qaeda militants, who stormed two petroleum industry compounds and took as many as 50 people hostage in a nearby residential complex.
In recent trading on the New York Mercantile Exchange, the benchmark U.S. crude rose $2, or 4.8%, to $41.88 a barrel, approaching its recent record high. Gasoline futures leaped nearly 6.7 cents, or 5%, to $1.354 a gallon.
The latest attacks on oil industry workers and facilities in the kingdom, the world's largest oil exporter, raised new concerns about supply in a skittish market, with the Saudis scheduled to boost production today from 8.3 million barrels to 9.1 million barrels a day. The Saudi's unilateral move is an attempt to prevent high prices from hurting global economic growth and has yet to be matched by fellow members of the Organization of Petroleum Exporting Countries. OPEC meets later this week to decide whether it will raise its official production ceiling or take any other measures to temper the recent price spike.Saudi Arabian security forces stormed the complex early Sunday morning, freeing the hostages, most of which were unharmed. But Saudi officials said the terrorists killed nine hostages and the Interior Ministry said one of the four attackers was captured; the others escaped and a manhunt was underway Sunday night in the port city, which is about 250 miles northeast of the capital, Riyadh. Abdulaziz al-Muqrin, the top al Qaeda leader in the kingdom, reportedly claimed responsibility for the attack, which came just days after al-Muqrin threatened urban guerrilla warfare designed to topple the Saudi royal family.