Oil prices surged in the U.S. and worldwide on Tuesday after unprecedented terrorist attacks on the World Trade Center and the Pentagon triggered fears of a massive shortage.
London Brent Blend futures hit a peak of $31.05 a barrel, its highest level since December of last year, before closing at $29, up $1.55 or nearly 6 percent on the day.
Meanwhile, panic caused by rumors of a pending gasoline shortage sent prices skyrocketing in Oklahoma, Mississippi, Michigan and other states.
Gasoline wholesalers and retailers quickly raised prices on fears supplies would be disrupted following Tuesday's terrorist attacks. The nation's largest oil companies immediately tried to allay those worries by freezing their prices and pledging to keep distribution steady.
Nevertheless, consumers in the various parts of the country lined up for an hour or more to fuel-up on gasoline costing as much as $5 a gallon.
Prices at a Phillips 66 station, along Interstate 70 in Missouri, were $2.99 a gallon for regular unleaded gasoline and $4.99 for premium unleaded on Tuesday, though it was not immediately clear whether the spikes were related to terrorist attacks.
In the Kansas City suburb of Lee's Summit, lines at some stations extended as far as 20 car lengths.
Donna Cox, manager of Osage Beach Self Serve in the Missouri Ozarks, said prices are on the rise as people grow concerned about supplies. Prices at the station went from $1.59 to $1.79.
In Mississippi, Governor Ronnie Musgrove has been asked by Attorney General Mike Moore to intervene to stop reports of price gouging at some gasoline stations.
Moore said rumors of refineries around the country being closed in the aftermath of the terrorist attacks caused panic among some consumers.
Motorists formed long lines at gas stations around the state trying to stock up on fuel. Consumers have reported gas prices at some stations in the Delta have been as high as $3.60 a gallon.
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. 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.
Reuters and the Associated Press contributed to this report
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