Oil prices soar on US terror alert

A warning from US Homeland Security about an 'imminent' al-Qaida attack on American soil has sent world oil prices soaring.

    Security chief Ridge says al-Qaida is planning an attack

    US markets also slumped after Homeland Security chief Tom Ridge on Thursday issued the terse warning, saying the al-Qaida was planning another major attack in an effort to disrupt the November presidential elections.

    "Since September 11, 2001, we have had intelligence that al-Qaida intends to launch more attacks against the homeland," Ridge said.

    "Credible reporting now indicates that al-Qaida is moving forward with its plans to carry out a large-scale attack in the United States in an effort to disrupt our democratic process," he said.

    "We lack precise knowledge about time, place and method of attack," Ridge said. "But along with the CIA, FBI and other agencies, we are actively working to gain that knowledge."

    Panic reaction

    Shortly after the warning was issued, New York's benchmark light sweet crude oil contract for delivery in August soared by $1.25 to close at $40.33 a barrel, the first finish above $40 since 1 June. Brent North Sea crude for August leapt $1.16 to $37.77.

    US stocks slumped as frightened investors sold, pushing the Dow Jones Industrial Average down 71.16 points and the Nasdaq composite down 30.79 points.

    "Credible reporting now indicates that al-Qaida is moving forward with its plans to carry out a large-scale attack in the United States in an effort to disrupt our democratic process"

    Tom Ridge,
    US Homeland Security chief

    White House spokesman Scott McClellan defended the government warning, saying "our most important responsibility is to protect the American people".

    "And when we receive credible information of this nature that shows that al-Qaida is continuing to work to carry out a large-scale attack against the American people, it's important to keep the American people informed about the intelligence," he said.

    "And that’s exactly what we are doing."

    Issuing the alert, Ridge said authorities had no specific intelligence about whether al-Qaida was targeting the Democratic convention later this month in Boston or the Republican convention in New York at the end of August.

    The terror alert level will stay at elevated or yellow – the third of five levels on the colour-coded scale.

    "While we are not raising the colour-coded threat level today, we are constantly reviewing threat reporting and strengthening the nation's security," Ridge said.

    SOURCE: Agencies


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