Crude prices rise amid fears of shortage

Concerns that the U.S. will launch a military retaliation against perpetrators of yesterday’s terrorist act against that country sent crude oil prices skyrocketing at the close of markets yesterday.

Crude oil in London rose to an eight-month high, with investors scrambling into energy stocks, sending the Canadian oil and gas index up more than 182 points in about 70 minutes of trading before the Toronto Stock Exchange was shut down, reported the Financial Post.

Meanwhile, analysts said while the attacks present no immediate threat to world oil supplies, the uncertainty surrounding the events will continue to lift oil prices, which could push the already fragile U.S. economy into a recession.

Major U.S. oil companies said they are freezing their prices and pledging to keep distribution steady in the wake of Tuesday’s terrorist attack on the United States. However, amid fears of short supplies of gasoline and diesel, U.S. motorists and truckers were lining up to fill tanks while some gas stations were hiking prices.

Exxon Mobil and BP, the nation’s two largest oil companies told traders that supplies would not be hampered, with the exception of New York City. The companies urged consumers not to stockpile gasoline, reported the Associated Press.

Exxon Mobil spokesman Tom Cirigliano said supplies were ample, and that the company was trying to avoid an artificial shortage.

In Washington, the American Petroleum Institute issued a statement reassuring motorists that there is no threat of a fuel shortage.

“Fuels are flowing normally to wholesale and retail markets throughout the United States, and refinery production remains strong,” said the API.

The Secretary-General of the Organization of the Petroleum Exporting Countries, Ali Rodriguez, said 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. Furthermore OPEC’s members are prepared to use their spare capacity, if deemed necessary, to achieve these goals,” said Rodriguez.

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