Newspaper article THE JOURNAL RECORD

Oil Futures Prices Fall in Erratic Trading Session

Newspaper article THE JOURNAL RECORD

Oil Futures Prices Fall in Erratic Trading Session

Article excerpt

Oil futures prices fell Friday, as traders scrambled to make deals in London when hints of peace hit the New York Mercantile Exchange just after it was temporarily closed by a fluke telephone problem.

On the spot or cash market, Kerr-McGee Refining Corp. lowered its posted prices by $1 a barrel, bringing Oklahoma Sweet and West Texas Intermediate to $24.25 a barrel. It is paying $25.50 a barrel for Central Oklahoma Sweet and $23.75 a barrel for Oklahoma Sour.

When the erratic futures session was finally over, light sweet crude oil for delivery in February had fallen 58 cents to $24.90 per barrel on news that Secretary of State James A. Baker III would meet next week with Iraqi Foreign Minister Tariq Aziz.

``It's a bizarre day,'' said Ed Kevelson, an oil trader with Dean Witter Reynolds Inc. ``The market just closed cold.''

In early trading, oil showed a modest rally on perceptions that peace in the Middle East was not as likely as traders had thought earlier in the week. Crude was up 62 cents at $26.10 per barrel at 10:28 a.m. when an AT&T telephone problem forced the Mercantile Exchange to close, as did some other New York financial markets.

Many traders began thinking they had run into some unplanned time to relax, and some even left the exchange floor, until they got news of the first top-level U.S.-Iraqi diplomatic talks since Iraq invaded oil-rich Kuwait on Aug. 2.

Oil futures immediately fell more than $1 per barrel at London's International Petroleum Exchange.

With crude prices crashing across the ocean, New York speculators who had bought oil on the theory that the price would rise found themselves in trouble. Those who had sold oil on the theory that crude would fall were left in good shape by the telephone outage.

``They can either be smiling or frowning,'' said Bob Baker, an oil analyst with Prudential-Bache Securities Inc. …

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