Saudi Bomb Plot Unnerves Oil Market

Updated from 2:29 p.m. EST

Crude prices skyrocketed Friday on concerns world oil supplies would be cut after an attempted bombing at a major Saudi Arabian processing facility and continuing unrest in Nigeria.

Light, sweet crude for April delivery climbed $2.37, or 3.9%, to close at $62.91 a barrel on the Nymex. The contract gained about 3% this week as traders' worried that supplies could suffer.

The top story of the day for the energy markets was coming out of the Middle East. Three cars of suicide bombers launched an attack against a Saudi refinery, forcing their way through one of the facility's three security perimeters, according to reports. Saudi security forces kept the attack from succeeding by opening fire on the vehicles.

The cars were blown up, and three Saudi security guards were killed. Ten other guards were injured. The incident took place around a mile from the facility's inner security line, and the flow of oil wasn't affected.

"There is no interruption of physical crude but there will be a psychological impact which at least for the last trading day of the week should move prices higher," said Jim Williams, an energy analyst with WTRG Economics in London, Ark.

Crude prices soared on the news because the targeted facility handles around two-thirds, or 6 million barrels a day, of Saudi Arabia's oil output. As OPEC's largest producer, Saudi Arabia can supplement any supply shortages worldwide with its 1.1 million to 1.6 million barrels of spare daily oil production.

The runup in oil reversed recent market sentiment. On Thursday, traders overlooked the supply threats around the world and focused on the Energy Department's robust oil inventory report. Oil stocks are about 10% above last year's level, more than enough to compensate for ongoing supply disruptions in Nigeria.