MercoPress. South Atlantic News Agency

Oil shoots above $42 per barrel in New York

Oil prices this Tuesday, reacting to the weekend attacks in Saudi Arabia, rose sharply in New York and London reaching a record 42,33 US dollars per barrel, 2,45 US dollars more than last Friday.

In New York, Nymex light crude for July delivery hit $42.38 per barrel in afternoon trade, up over two dollars on the opening. Mike Fitzpatrick an oil analyst said "the market has been taken over by a feeling of panic and vulnerability; everybody is very anxious" about the psychological shock to the markets.

Bruce Evers a bank analyst from Investec commenting on the terrorist attacks that left 22 dead in Saudi Arabia underlined that "it's evident tactics have changed: terrorists are now after civilian objectives clearly targeting interrupting production".

The Organization of Oil Exporting Countries, OPEC, failed in its attempt to bring calm to markets even after promising to pump sufficient oil to satisfy world demand.

Indonesian Oil Minister Purnomo Yusgiantoro and Opec president, said this Tuesday he wanted a significant rise in production to deflate prices.

"Indonesia's position at the next Opec meeting is that Opec should increase the production ceiling to stabilise prices...The important thing is the increase should be a significant volume that can reduce prices" stressed Mr Purnomo.

Abdullah bin Hamad al-Attiyaa, the Qatari energy minister, said the "fear factor" had increased, but he added that Opec members would supply "as much as the market can absorb".

Kuwait's energy minister said his country had already increased production and would lift output further if necessary.

"We have additional production capacity that we can use. We are talking about 200,000 barrels per day," said Sheikh Ahmad al-Fahd al-Sabah.

An Opec official which controls 38% of the world's oil supplies and pumps 23,5 million barrels per day, voiced concern about instability in the Saudi Arabia.

Omar Ibrahim, head of Opec's information department, said the group was "concerned about global security and stability ... and especially about security in our member countries, including Saudi Arabia and Iraq"

Saudi Aramco, the kingdom's state oil company on Sunday said it was "committed to carrying out the Saudi Arabian government's policy of providing a reliable supply of oil to meet world energy demand".

The kingdom has already said it would be willing to tap into its extra 1-2m barrels a day of spare capacity to help lower prices, which some economists warn are beginning to threaten the recovery of the world economy. Opec this week in its Beirut meeting is expected to endorse raising Opec's output ceiling.