As fears of a massive shortage sent gasoline prices skyrocketing in various parts of the country following Tuesday's attacks, oil prices on international markets fell after reassurances from OPEC.
Anxious consumers in Oklahoma, Mississippi, Michigan and other states lined up for an hour or more to fuel up on gasoline costing as much as $5 a gallon.
The R and L Texaco in Oklahoma City increased the price of unleaded gasoline to $5 a gallon Tuesday after it was told by a supplier that it was unclear when the next shipment would be available and at what price.
At the Sunshine Conoco in Springfield, Mo., gas prices rose by 40 cents a gallon to $1.99.
In California, gasoline wholesalers raised prices by as much as 20 cents a gallon, although traders said there was no evidence of a shortage.
Authorities in various states were investigating instances of price-gouging. Mississippi Gov. Ronnie Musgrove declared a state of emergency, which will facilitate prosecutors in their pursuit of price-gougers there.
Mississippi authorities said they had received reports of gas prices doubling to as much as $3.60 a gallon within hours of Tuesday's terrorist attacks.
However, most gas stations are simply reflecting price increases decided by major oil companies, said Hector Gonzales, who works with a distributor in South Texas.
"Little guys... are held hostage by big oil companies with these price increases," Gonzales told Fox News, although he added that $5 a gallon was clearly abusive.
"On Tuesday, we received a price update effective immediately at 10:00 a.m. stating that any fuel purchased after 10:00 a.m. would be 10 cents higher," Gonzales explained. "Then at approximately 1:40 p.m. we received another price update stating that fuel would be another 10 cents higher. That is a 20-cent price hike in 4 hours."
Oil Majors, Experts Seek to Reassure Consumers
Exxon Mobil and BP sought to calm energy markets. The companies said supplies would not be hampered — except around New York City. They reassured consumers that there was no need to stockpile gasoline.
"We are asking all of our customers to maintain their normal buying habits," Exxon Mobil spokesman Tom Cirigliano said late Tuesday. "We have ample supplies. We're trying to avoid an artificial shortage."
Tom Kloza, director of Oil Price Information Service, a Lakewood, N.J., publisher of oil industry data, said he expects petroleum companies to act with restraint in the face of intense marketplace jitters.
"To be raising prices frenetically in this atmosphere makes the entire situation more difficult," he said. "The last thing the American public needs to think about right now is that they need to be racing out to load up on fuel."
The American Petroleum Institute, the industry trade group in Washington, 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," said the API, adding that gasoline and diesel fuel inventories "are adequate to meet demand."
"Refinery production remains strong," the trade group said.
Little Impact on Middle East Deliveries
Meanwhile, oil prices on international marketplaces fell following an early spike after OPEC gave reassurances over the security of world supplies.
London Brent blend futures subsided 46 cents to $28.60 a barrel after a $1.61 jump on Tuesday that resulted in the wake of the attacks.
Tuesday's initial gains came as dealers that were short on oil futures contracts, a bet that prices would fall, looked to cover those positions. The New York Mercantile Exchange has been closed since the attacks, leaving London's International Petroleum Exchange as the only option for traders.
"The move in prices was clearly a knee-jerk reaction to the news," said brokers GNI of Tuesday's gains.
Dealers said they saw little chance of any impact on deliveries from the Middle East, despite lingering worries that the attacks could be linked to recent violence in Israel.
Many took the view that sickly world oil demand growth was likely to evaporate as a result of ebbing consumer confidence and threat of world recession.
"Potentially there could be a lot of harm to the world economy which will trim the extent to which oil prices can go up," said consultant Gary Ross of New York's PIRA Energy. "And there's plenty of spare capacity among OPEC members if more oil is needed."
"Longer term, demand concerns hinge on an exacerbation of the current global economic slowdown driven by a loss of consumer confidence," said Adam Sieminski of Deutsche Bank. "Every one percent loss in expected global GDP growth takes about 400,000 bpd away from expected oil demand growth."
The OPEC cartel said it was committed to ensuring stable supplies and prices.
OPEC Secretary-General Ali Rodriguez rejected suggestions that any member of the Arab-dominated group, which includes Saudi Arabia, Iraq, Iran and Libya, would use oil as a political weapon if violence escalated in the Middle East.
"None of these things change OPEC's decision to guarantee the stability of the oil market. OPEC member countries are committed to their promises to guarantee sufficient oil supplies," Rodriguez told Reuters.
Reuters and the Associated Press contributed to this report