Oil Futures Continue to Fall

Oil futures prices collapsed again Friday, sending Treasury bond futures soaring on the belief that the nation will be nearly free of inflation in the coming months.

The crude oil contract for delivery in April tumbled well below $14 a barrel, hitting another record low on the New York Mercantile Exchange. At one point, April crude dropped to $13.40 before settling at $13.53.

“There’s nothing under the market to give it any support,” said Peter Beutel, an analyst in New York with Rudolf Wolff Energy.

“It’s just a continuation of the selling,” he said. “The refiners are selling, the locals, the floor traders; they’re all selling.”

The plunging oil prices revved up activity at the Chicago Board of Trade, where an estimated 395,000 Treasury bond contracts changed hands. If the estimate holds up, it would eclipse the 387,262 record set last October.

The March T-bond contract advanced by nearly the limit for daily trading to 90 10/32 before settling at 90 6/32, up 1 26/32 from the previous close.

“Treasury bonds are in the runaway stage of their bull market,” said Gary Dorsch, an analyst in Chicago with G.H. Miller & Co. “Everybody is in complete agreement about the direction of the market.”