Crude Prices Fall below $13 a Barrel
From , Wire Reports, THE JOURNAL RECORD
NEW YORK - More barriers fell Monday in the winter thaw in oil prices, with the main grade of U.S. crude dropping convincingly below $13 a barrel in futures markets and falling under $20 a barrel in oil company contracts.
Some analysts said $8-a-barrel oil is no longer unthinkable.
""The market is definitely not convinced that this thing has stopped falling,'' said Peter Beutel, an oil trading analyst at the commodities firm Rudolf Wolff Futures Inc.
He said traders appeared to be searching nervously for a floor to prices and described Monday's market as being ""like a guy in a minefield, putting his fingers to his ears and stepping around.''
In oil price related activity Monday:
- On the New York Mercantile Exchange, West Texas Intermediate crude for April delivery plunged as low as $12.15 a barrel during trading before recovering slightly to close at $12.27. That still left the best-known domestic crude down 99 cents a barrel from Friday's close.
- The price for West Texas Intermediate crude on the spot market fell to $12.25 per barrel, down from a closing price of $13.25 Friday.
- In Oklahoma, the average posted price for Oklahoma Sweet crude oil is about $12.40 per barrel to about $12.50, according to Melvin Moran, of Moran Oil Co. of Seminole. Kerr-McGee Corp. of Oklahoma City has a posted price of $16.40 for Oklahoma Sweet. Prices are as low as $15 for Kansas crude oil, Moran said.
The last time West Texas Intermediate sold for such prices was in 1978.
Closer to consumers' pocketbooks, more big oil companies cut prices for their contract purchases.
Chevron Corp. reduced the price it will pay for West Texas Intermediate by $2 a barrel to $18. At the start of 1986, Chevron was paying $28 a barrel.
Sun Co., which began the year at $28.50 a barrel, announced its 11th price change of 1986, cutting West Texas Intermediate by $1 a barrel to $16. Phillips Petroleum Co. dropped $1 to $16 a barrel and Diamond Shamrock Corp. lowered prices $1 to $15.50.
Dallas-based Diamond Shamrock Corp. said it has lowered the price it pays for West Texas Intermediate crude by $1 to $15.50 a barrel. The move was effecitve Saturday.
The company also reduced the price its pays for a variety of other grades of U.S. crudes by $1 a barrel.
Tulsa-based Citgo Petroleum Corp., a subsidiary of the Southland Corp. of Dallas, said it was cutting it crude oil price postings by $1 per barrel. That brings the price Citgo will pay for West Texas Intermediate crude down to $14 per barrel.
"Prices continue to deteriorate at the wholesale product level," said Ronald E. Hall, Citgo president and chief executive officer, "and no stability is in sight for crude oil prices worldwide. We are disappointed with the continuing decline in product prices, but we have no choice other than once again to adjust our raw material costs downward."
The latest cuts left the U. …