Oil futures prices plunged well below $13 a barrel Monday, sending a low-inflation signal into the Treasury bond and precious metals futures markets.
"It was a very depressing day for oil," said Nauman Barakat, an analyst in New York with Smith Barney.
The crude oil contract for delivery in April slumped to $12.15 a barrel on the New York Mercantile Exchange before settling at $12.27, down 99 cents from Friday's close. It was only three months ago that crude was trading above $30 a barrel.
Triggering Monday's tailspin, Barakat said, appeared to be a rumor "that there are a couple of cargoes (each about 1 million barrels of crude oil) that have not been able to find a home--there's no buyers."
Attempts to sell these were badly disruptive on the futures market, he said.
Also pressuring prices, he said, was the prediction late last week by Saudi Arabia's oil minister, Ahmed Zaki Yamani, that crude oil could hit $10.
"What Yamani has said in the past as far as targets go, basically comes true," Barakat said.