Oil, gold prices jump

May 21, 2001
Web posted at: 1133 GMT

LONDON (CNN) -- Oil prices rose in midday trade on Monday, amid concerns the U.S., the world's biggest consumer, could face gasoline shortages.

Gold prices also rose, hitting 10-month highs in London as low interest rates worldwide tempted investors, who also expected supplies to tighten as central banks ended bullion sales.

Gold shot up $14.45 to $287.45 an ounce in Europe. That was below the trading price of $296 in Asia earlier on Monday.

Brent crude futures for July delivery rose 19 cents to $29.58 on London's International Petroleum Exchange. NYMEX June unleaded gasoline was 1.46 cents up at $1.0836 a gallon, just off a high of $1.0840.

Brent surged to a four-month peak on Friday partly on fears of insufficient supplies ahead of the peak U.S. driving season on May 28.

"While gasoline was clearly the main driving force behind the market on Friday, there is little doubt that the Middle East tension also provides some upside momentum for crude," Lawrence Eagles, oil analyst at GNI Research, wrote in a daily energy report.

Israeli warplanes hit Palestinian security headquarters following a deadly suicide bombing in Israel, inspiring a run on futures.

Traders were also keeping a close eye on OPEC oil policy ahead of a June 5 meeting in Vienna to decide whether to increase output or not. OPEC President Chakib Khelil, who is also Algeria's oil minister, said on Sunday an increase was unlikely with current market fundamentals.

"People are not really for an increase in June," Khelil said. "OPEC must respond to crude, not petroleum products," Khelil said. "Increasing crude supplies won't solve the problem...and it may come back to haunt us."

U.S. Vice President Richard Cheney said on Sunday the lack of refinery capacity and not OPEC output levels were the root of U.S. energy problems.

--from staff and wire reports

Oil prices get a lift from OPEC production cut
Mar. 19, 2001

OPEC to cut quotas to support oil prices - Mar. 17, 2001

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