What will you do tomorrow ? buy gold mines,buy non-middle east oil and gas shares or food and tabacco and maybe pz cussons?

U.S.

Crude Oil, Gold Prices Rise After Terror Attack in Saudi Arabia
May 31 (Bloomberg) -- Crude oil and gold prices rose after the third terrorist attack this month against foreign workers in Saudi Arabia left 22 dead over the weekend, raising concern higher fuel costs may slow global economic growth.

Oil for October delivery rose 520 yen a kiloliter (76 cents a barrel), to 22,890 yen a kiloliter ($33.29 a barrel) on the Tokyo Commodity Exchange, Asia's biggest energy-futures market. Gold, seen as a haven from declines in equity markets, rose as much as 0.5 percent to $395.82 an ounce for immediate delivery, as Asian stocks fell.

Saudi Arabian security forces yesterday stormed a housing compound in the city of Khobar used by international workers and rescued 25 people held hostage by gunmen. Crude prices have risen 40 percent in the past year on the New York Mercantile Exchange, the world's biggest energy market, partly because of attacks in Iraq and Saudi Arabia in the past two months.

``It's all about Saudi Arabia and what they will do. If they have problems inside their own borders, it shows a bleak picture,'' said Michael Preiss, chief investment strategist at CFC Securities Ltd. in Hong Kong, a unit of Switzerland-based CFC Group. ``It's a wake-up call for Saudi Arabia to really be decisive and communicate the message that the situation is under control.''

New York and London, the world's two biggest oil futures markets, are closed Monday for public holidays.

Gold, Stocks

Gold for immediate delivery rose as much as $2.17 an ounce to $395.82 an ounce. The precious metal traded at $395.25 at 7 p.m. Tokyo time. The Morgan Stanley Capital International Asia Pacific Index, which tracks more than 900 stocks, is headed for its second monthly slide amid concern rising crude prices will slow economic growth.

Currencies in Japan, Singapore, Taiwan, Thailand, Indonesia, South Korea and the Philippines gained against the dollar, underscoring concern about terrorist attacks against U.S. interests.

Saudi Arabia, which has capacity to produce about 10 million barrels a day, has an OPEC limit of 7.64 million barrels a day and last month pumped 8.35 million barrels a day, according to Bloomberg's estimates.

``Fundamentally, what we have is an 80 million barrel a day oil market with 2 million barrels spare capacity in one country,'' said Kurt Barrow, a Singapore-based energy consultant at Purvin & Gertz Inc.

New York

Crude oil futures in New York rose on Friday for the first day in four amid concern about possible terror attacks in the Middle East and consuming countries over the weekend.

A statement purportedly issued by the al-Qaeda terrorist network said it carried out the attack in Saudi Arabia at the weekend, Agence France-Presse said.

Crude oil futures in New York rose 2.2 percent on Monday, May 3, the first trading session after gunmen killed five employees of Swiss engineering company ABB Ltd. at an oil refinery in the town of Yanbu.

``It's obvious now that al-Qaeda is now targeting oil installations,'' said Phil Flynn, senior energy trader for Alaron Trading Corp. in Chicago. ``We have to be worried about attacks upstream, downstream, overseas and at home.''

Terrorism attacks have added to concern about supply as U.S. gasoline supplies lag year-earlier levels before the peak summer demand months.

OPEC

The Organization of Petroleum Exporting Countries, source of a third of the world's oil, this week will probably approve a plan to boost output and lower near-record prices, OPEC officials and energy analysts said.

Saudi Arabia on May 21 announced an increase in output and proposed that OPEC boost the group's production target by at least 2 million barrels a day, or 8.5 percent. OPEC, which meets Thursday in Beirut, may decide to suspend quotas altogether, two officials of the group, who asked not to be identified, said Friday.

``Contracts are also rising on speculation it may be difficult for OPEC to increase output quotas at its June 3 meeting as Venezuela and other countries are against raising production,'' said Tatsuo Kageyama, an analyst at Kanetsu Asset Management in Tokyo.

The International Petroleum Exchange in London is closed for the Spring Bank Holiday. The New York Mercantile Exchange is closed for the Memorial Day holiday.

To contact the reporters on this story:
Hector Forster in Tokyo at hforster@bloomberg.net and Sri Jegarajah in Singapore at (65) sjegarajah@bloomberg.net.

To contact the translator on this story:
Hiromi Horie in Tokyo at hhorie@bloomberg.net.

Last Updated: May 31, 2004 06:34 EDT

http://quote.bloomberg.com/apps/news?pid=10001058&sid=aW9N0ECEB2bY&refer=movers_by_index

Russia = oil = no problem for everyone.
rgds aj

Saudi Arabia is in a difficult position now. The terrorists say that the Saudi goverment in the shape of the Saudi royal family are not fit keepers of the two holy cities of Medina and Mecca and need to be removed. They are also blamed for allowing US troops onto Saudi soil during the previous Gulf war. They were pursuaded at the time that after Kuwait, Saudi would be next on Sadam's list.

The net result now is that if the Saudis get rid of the US then they are very vunerable to an overthrow. If they increase US involvement in security issues then they will be attacked more. If they do nothing then terrorist outrages will continue. This all seems to lead to instability in oil production.

The US has told its citizens to leave Saudi Arabia. How long before other governments issue to same warnings? Saudi cannot run the oil business without foreigh workers. I see much of this as an attempt by terrorists to create global financial instability to make the US retreat from contentious areas. The US being what they are will not retreat of course.

AJREN,
Don't you mean LUKOY.