Oil hovers below $103 as traders eye Saudi unrest

SINGAPORE – Oil prices hovered below $103 a barrel Friday in Asia as traders worried protests in Saudi Arabia could escalate and potentially hamper production in the world’s largest crude exporter.

Benchmark crude for April delivery was up 9 cents at $102.79 a barrel at midday Singapore time in electronic trading on the New York Mercantile Exchange. The contract lost $1.68 to $102.70 on Thursday.

In London, Brent crude was up 7 cents at $115.50 a barrel on the ICE futures exchange.
On Thursday, Saudi police attacked a protest by minority Shiites in the eastern city of Qatif. Shiites, who account for about 10 percent of the kingdom’s 23 million population, have protested for two days demanding the release of political prisoners.

Pro-democracy activists have called for protests on Friday in the capital, Riyadh, to demand reforms to the monarchy. Public demonstrations are banned in Saudi Arabia.

Investors are sensitive to any sign of upheaval in Saudi Arabia because the OPEC leader has been using its spare capacity to make up for output lost amid the violent uprising against Libya’s government. When news broke that Saudi Arabian police fired shots to break up the protest Thursday, prices soared $3 in just 12 minutes.

“Our biggest fear has been that the unrest infecting the Middle East would surface as violence or bloodshed in Saudi Arabia,” Cameron Hanover said in a report. “If protests start to create martyrs in Saudi Arabia, then it could be the beginning of the end.”

In other Nymex trading for April contracts, heating oil was up 0.8 cent at $3.05 a gallon and gasoline rose 1 cent to $3.03 a gallon. Natural gas was down 0.9 cent at $3.82 per 1,000 cubic feet.