WASHINGTON - Oil prices jumped $1 a barrel to a new high Monday after the death of Saudi Arabia's King Fahd raised concerns about the kingdom's long-term political stability. The rally, which faded late in the day, also stemmed from traders' skittishness about U.S. refinery glitches and Iran's nuclear program.
Saudi Arabia's oil policy is not expected to change now that power has formally shifted to Fahd's 81-year-old brother, the de facto leader during the past decade. However, with oil consumption rising around the world and only a limited amount of excess production capacity available, energy traders are easily put on edge by a change in the weather in an oil-pumping region, let alone a transfer of authority within the world's biggest oil producer.
"The market is hypersensitive to facts, rumors and noise because the supply cushion is gone," said Larry Goldstein, president of the New York-based nonprofit Petroleum Industry Research Foundation. <snip>
http://www.thestate.com/mld/thestate/business/12278721.htmOther reasons oil prices increase:
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