Oil futures top $30 after WTC attack Refiners likely to stock up on oil, says analyst By Myra P. Saefong, CBS.MarketWatch.com Last Update: 3:20 PM ET Sept. 11, 2001

NEW YORK (CBS.MW) -- October Brent crude topped $30 a barrel in London after terrorist attacks on the World Trade Center in New York and the Pentagon near Washington.

October Brent crude rose to an intraday high at $31.05 a barrel on the International Petroleum Exchange Tuesday. The contract closed at $29.06, up $1.61, or 6 percent.

FRONT PAGE NEWS NYC's World Trade Center struck International markets tumble as U.S. attacked Washington under attack Treasurys soared after attacks; U.S. trade closed Market news and more! Sign up to receive FREE email newsletters Get the latest news 24 hours a day from our 100-person news team. Prior to the news on Tuesday, Brent was trading at $27.59 a barrel after closing at $27.57 on Monday.

Terrorist attacks leveled the two World Trade Center towers in New York City and rocked the Pentagon in Virginia, across the Potomac River from Washington, D.C., Tuesday morning, causing pandemonium and terror in the nation's political and financial centers. See full story.

Trading of petroleum futures on the New York Mercantile Exchange was closed Tuesday. The exchange was unreachable by phone.

Based on the movement in the Brent crude market, Nymex crude could push $30 a barrel when the exchange eventually reopens, said Phil Flynn, an analyst at Alaron.com in Chicago.

It's "very important to see that Saudi Arabia and the other OPEC countries come out and support the U.S and do what they can to keep oil prices under control in this crisis to show that they despise these dastardly acts," he said.

OPEC Secretary-General Ali Rodriguez said Tuesday that OPEC is committed to meeting world oil demand and won't withhold oil following the attacks on the U.S., according to Dow Jones. He noted that members of the oil cartel are prepared to use their surplus capacity if necessary.

Rodriguez rejected suggestions that some members might use oil as a weapon and withhold supplies in the aftermath of the attacks, the news agency also reported.

Refiners likely to stock up

Until it's really clear who's responsible, "there will be a lot of uncertainty in the oil industry and (refiners) are going to want buy oil for inventory in order to protect against sanctions against Iraq or some kind or Iran, for example, if they turned out to be responsible," said Michael Lynch, chief energy economist at DRI-WEFA, a unit of Global Insight.

"If you're oil company want to be prepared for the possibility that supplies would tighten for some reason and inventories right now aren't high enough by any means for anyone to be comfortable," he said.

So for the time being, "inventories will go up and prices will go up and remain over $30 a barrel," he said.

On Monday, crude for October delivery fell to $27.63 a barrel, down 40 cents. October gasoline fell by 0.67 cent to 81.87 cents a gallon. Among the heating fuels, October heating oil prices closed at 79.61 cents a gallon, down 0.67 cent. October natural gas slipped by 10.8 cents to $2.392 per million British thermal units.

Shares in oil companies also soared in London. British Petroleum (UK:BP: news, chart, profile) (BP: news, chart, profile) rose 5 percent to 593 pence while Shell (UK:SHEL: news, chart, profile) rose 2.2 percent to 557.50 pence.

API update still due out

A spokesman at the American Petroleum Institute in Washington D.C. said the API will release its weekly petroleum supply data this afternoon as scheduled, unless it's ordered by authorities to evacuate the building.

The latest reports from the American Petroleum Institute and the Energy Department released last week have underscored declines in U.S. gasoline inventories since mid-July. See related story.

Gold futures jumps to $280 before halt

Gold futures soared as high as $290 an ounce Tuesday morning before trading was halted, their highest level in over three months in reaction to the apparent terrorist attacks in New York and Washington D.C.

Trading was halted as of 9:38 a.m. Eastern time and will remain closed for the rest of the day. Representatives at the Commodities Exchange division of the New York Mercantile Exchange were unreachable.

Gold for December delivery rose to an intraday high at $290, its highest level since late May. It last traded at $280 an ounce, up $6.30 just after 9:30 a.m.

"It's just a tragic day," said Amaury Conti, an equity trader at U.S. Global Investors, and the moves in gold early Tuesday were definitely a move to "safety" in reaction to the apparent terrorist attacks. See full story.

Other exchanges closed

Trading on the Chicago Board of Trade was halted as of 10:15 a.m. Eastern time, a spokeswoman at the CBOT said, and trading will be closed for the rest of the day.

A spokesperson at the Chicago Mercantile Exchange said trading ceased 10:15 a.m. Eastern time and all trading will be suspended for the remainder of the day.

Representatives at the New York Board of Trade, which includes the New York Cotton Exchange and the Coffee, Sugar and Cocoa Exchange were unreachable and trading remained closed.

The New York Stock Exchange was also closed for the day.

http://cbs.marketwatch.com/news/story.asp?guid=%7B9FD7AF3C%2D8C7F%2D4782%2DB1F5%2D03D85048635B%7D&siteid=mktw

-- Martin Thompson (mthom1927@aol.com), September 11, 2001

Answers

Martin, Price at the pumps... Well, around 9:30 I fueled up.. Price? 1.49 a gallon regular unlead. At the present time? 2.00-4.00! 2.00 being the lowest in our area.

-- Tess (webwoman@iamit.com), September 11, 2001.

09/11/2001 - Updated 02:50 PM ET Oil prices surge after attack on U.S.

USA under attack LONDON (Reuters) — Oil prices surged Tuesday after aircraft attacks destroyed the World Trade Center and damaged the Pentagon in a terror attack on the United States.

London Brent Blend futures hit a peak of $31.05 a barrel, its highest level since December last year, before closing at $29.06, up $1.61 or nearly 6% on the day.

"This has heightened uncertainties around the Middle East," said Tim Noest of brokers ADM in London. "Brent just went through the roof."

The attacks presented no immediate threat to world oil supplies, but dealers said investors had been forced into the market because of the uncertainty surrounding the attacks, and because commodities presented a safe haven for jittery equity investors.

U.S. President George W. Bush called the deliberate aerial assaults an "apparent terrorist attack," and traders said there was speculation they could be linked to the recent explosion of violence in the Middle East between Palestinians and Israel.

Early speculation about the source of the attacks centered on Saudi- born dissident Osama bin-Laden.

U.S. companies unable to trade on the New York Mercantile Exchange, which closed after the attacks, had funneled their purchases through London's International Petroleum Exchange.

"We're seeing a flood of orders which have been exacerbated by the close of the New York exchange. International tension means oil up, gold up," said broker Christopher Bellew of Prudential Bache in London.

The Secretary-General of the Organization of the Petroleum Exporting Countries Ali Rodriguez said that the Arab-dominated cartel would ensure world oil supplies and price stability.

"OPEC member countries are committed to their promises to guarantee sufficient oil supplies and their policy of strengthening market stability," Rodriguez said after the attacks.

"Furthermore OPEC's members are prepared to use their spare capacity, if deemed necessary, to achieve these goals."

Rodriguez said there was no chance that any cartel members would threaten to use oil as an economic weapon in the Middle East situation.

OPEC is due to meet on September 26 and had been expected to leave oil supplies unchanged after cutting output from the beginning of the month by a million barrels a day.

Rodriguez said OPEC countries had substantial spare production capacity and were prepared to use it in order to achieve their goals.

http://www.usatoday.com/money/markets/2001-09-11-oil-surge-attack.htm

-- Martin Thompson (mthom1927@aol.com), September 11, 2001.