Oil Futures Plunge to $14.17 a Barrel in N.Y.

West Texas Intermediate crude oil plummeted 95 cents Thursday on the New York Mercantile Exchange to $14.17 a barrel. Earlier, it had traded as low as $13.85 before regaining some lost ground.

Separately, Diamond Shamrock slashed the price it is willing to pay for West Texas Intermediate, the nation’s benchmark crude, to $16.50 a barrel--the lowest level in seven years.

“There’s a distinct possibility (that) oil prices could crack $10 a barrel before stabilizing unless someone decides to cut production inside or outside OPEC,” said William Randol, an analyst at First Boston Corp. in New York.

A Historic First

Industry sources said Indonesia, the Organization of Petroleum Exporting Countries’ only Southeast Asian member, will lower prices by linking its oil to a market basket of internationally traded crudes in a bid to bolster sagging oil exports.

West Texas Intermediate closed below the critical $15-a-barrel mark Tuesday for the first time since it began trading on the exchange in 1982.

On the international spot market, where oil is sold to the highest bidder, West Texas Intermediate dropped 45 cents to $14.20 a barrel Thursday. West Texas Intermediate was trading at $31.80 a barrel three months ago. Domestic oil prices have not been in the $14-a-barrel range since 1979.

In Dallas, Diamond Shamrock cut the price it will pay for West Texas Intermediate by $2 to $16.50 a barrel. Most other oil companies are paying between $18.50 and $22 a barrel for the crude.

Big Players See Bottom

“The big players moved in and sold actual barrels on the Merc because they think there is still room for prices to sink,” said Jay Amberg, pricing editor at the Oil Buyers’ Guide in Lakewood, N.J. “But many feel the market is close to the bottom.”

Home heating oil for March delivery on the New York Mercantile Exchange dropped 1.01 cents to 50.22 cents a gallon, and regular leaded gasoline fell 1.88 cents to 42.20 cents a gallon.

Since late November, oil prices have unraveled relentlessly because Saudi Arabia, OPEC’s principal producer, is pushing surplus crude into the already glutted market in an attempt to force Britain and other non-OPEC members to prop up prices by curbing their output.

On the North Sea market, Britain’s main Brent crude for April delivery skidded to $14.55 a barrel from a high of $15.20 early in the day.