Oil: Price rises toward US $61 on Saudi threat

NEW YORK - Oil rose toward US$61 a barrel on Friday after Britain's Royal Navy said forces had been deployed to counter a possible threat to the world's largest oil export terminal in Saudi Arabia.

US crude finished 39 cents higher at US$60.75 a barrel, while London Brent rose 31 cents to US$61.08.

Western naval forces in the Gulf moved to counter a possible seaborne threat to Saudi Arabia's Ras Tanura oil terminal, Britain's Royal Navy said.

"Acting on information received, Coalition naval forces, operating in support of Saudi and Bahraini forces, have deployed units to counter a possible maritime threat to the oil facilities at Ras Tanura," the Royal Navy said.

Ras Tanura has a capacity of 6 million barrels per day, according to the US Department of Energy.

Tempering the gains, oil consultant Petrologistics said Friday that Opec output was rising this month. The estimate follows pledges from Opec members Nigeria and Venezuela to cut October supply and last week's deal to further trim production starting Nov. 1.

"The Petrologistics headlines helped put a bit of pressure on crude despite the reports of threats to Saudi Arabia's installations," said Nauman Barakat, senior vice president at Macquarie Futures USA.

Opec output

The increase in Opec oil output in October was led by a rebound in supply from Nigeria, which had pledged to cut supply during the month, Petrologistics said.

The exporter group is expected to pump 30.18 million bpd in October, up from 30.15 million bpd in September, said Conrad Gerber, head of the Geneva-based consultancy which tracks oil shipments.

The Organisation of the Petroleum Exporting Countries last week agreed to cut output by 1.2 million barrels per day from Nov. 1, adding to October cutbacks pledged by Nigeria and Venezuela.

It is too early so far to tell how much Opec output will drop next month following the deal to curb supply, Gerber said.

"It's a mixed bag," he said. "We've already had intimations the Saudis are going to cut back and I think the same goes for Kuwait and the UAE."

But with oil prices still high by historical measures - up from below US$20 in January 2002 - some analysts are sceptical Opec will reduce supply by the full amount pledged.

Some Opec members have said the exporter group may need to trim supply further at its next meeting, scheduled to take place in Abuja, Nigeria, on Dec. 14.

- REUTERS