Crude prices jump on new security concerns

Crude oil prices were up on Friday as an attack on a Saudi Arabian oil facility increased concerns already high due to security problems in Nigeria and Iraq.

April contract Brent crude prices on the International Petroleum Exchange were up $1.78 to $62.32 per barrel, 70 cents of that increase coming after reports of the Saudi attack surfaced. West Texas Intermediate crude for April delivery on the New York Mercantile Exchange advanced by $1.75 to $62.29 per barrel, a dollar of which came after the Saudi attack. WTI had lost 47 cents on Thursday, while Brent had gained 10 cents late in the day.

These price hikes came despite Thursday’s report form the US Energy Information Administration that US crude oil stockpiles were up by 1.1 million barrels in the week ending February 17. This increase was about what had been expected and came despite lower imports for the week. Part of the increase came due to less crude oil being refined into petroleum products. Meanwhile, the report showed that gasoline inventories grew by 100,000 barrels during the week to 225.6 million barrels. The increase in gasoline stockpiles, while less than expected, still put the supply at its highest total since June of 1999.

In the commentary that came with its weekly report, the EIA said that this unusual condition of high inventories coupled with high prices could persist for a substantial length of time, until the uncertainties are removed from the market or until spare capacity increases up and down the supply chain.