NEW YORK – Oil prices jumped over $1 to near $67 a barrel Thursday following threats that Al Qaeda was preparing attacks on the United States and supply concerns from crude oil exporters Iran and Nigeria.
Dealers ignored bearish weekly U.S. data that showed oil inventories piling up and focused instead on the potential for a major supply outage.
U.S. crude oil settled $1.10 higher to $66.83 a barrel on the New York Mercantile Exchange after hitting $66.95, the highest level in nearly four months, in Thursday activity. London Brent crude settled at $65.23, up $1.04.
"Question marks over Nigeria and Iran and the effects of cold weather in Russia, which have reduced exports, are providing a lot of support," said Christopher Bellew of Bache Financial.
Analysts warned that any prolonged supply disruption could wipe out healthy inventories very quickly.
Just over 220,000 barrels per day (bpd), or 10 percent of national output, of Nigerian oil production has already been shut in following militant attacks.
The militants have threatened to target all oil companies operating in the country, the world's eighth largest exporter.
At the same time, there is no sign of an easy resolution to the dispute between the West and Iran.
No. 4 oil exporter Iran faces referral to the U.N. Security Council over concerns it is seeking to build an atomic bomb. Iran has denied the charge and analysts fear it might hold back crude exports in response to any punishment from the West.
Usama bin Laden warned Thursday via a videotape broadcast on Al Jazeera television that Al Qaeda was preparing new attacks inside the United States, the world's top oil consumer.
"The operations are under preparation and you will see them in your houses as soon as they are complete, God willing," said the speaker on the audio tape, who sounded like bin Laden.
Russia, meanwhile, has cut natural gas supplies to Europe and trimmed some oil production because of extreme cold weather at home.
Against the backdrop of so much supply uncertainty, most predict the Organization of the Petroleum Exporting Countries will leave output unchanged when it meets in Vienna at the end of the month.
"OPEC is unlikely to cut production in January as things stand right now," a senior OPEC delegate said Thursday. "Saudi Arabia and some OPEC producers are capable and willing to increase production if there is an actual need for extra oil."
U.S. inventory data released Thursday showed a sharp rise in stockpiles of crude and modest increases in gasoline and distillates, including heating oil.