Saudi attack has psychological effect

HOUSTON, May 31 (UPI) -- Global oil traders spent Monday mulling the weekend terror attack on oil workers in Khobar in eastern Saudi Arabia, the New York Times reported.

While there is little evidence that the latest attack on foreign residential and office complexes in the kingdom will hurt oil output, the psychological effect on prices could be substantial.

"The attack was orchestrated to display that the royal family cannot maintain security in the heart of its own oil patch, and in that sense they succeeded," said Jean-Francois Seznec, an authority on Saudi Arabia and a professor at Columbia University.

The attack's exact impact on prices will not be seen until Tuesday when commodities markets open, traders said, because the United States observed a holiday Monday.

"Even though this doesn't disrupt supply, it is a significant psychological shock," said Daniel Yergin, chairman of Cambridge Energy Research Associates in Massachusetts.