Oil Prices Plunge Below $10 a Barrel, Then Bounce Back

Oil prices briefly fell below $10 a barrel today, the lowest in more than eight years and one-third the cost four months ago, caused by bulging supplies, warm weather and pessimism about the depressed market.

“It’s impossible to say where it will all end,” said Peter Beutel, an analyst with Rudolf Wolff Futures Inc., a New York commodities futures firm.

The price of a standard 42-gallon barrel of West Texas intermediate, the main U.S. crude and an important market indicator, fell as low as $9.75 in early dealings on the New York Mercantile Exchange, down from $10.42 Monday. The price later shot back up above $10, a move that dealers attributed to technical factors.

That price level compares to the pre-Easter price of $11.44 a barrel and the late November price of $31 a barrel before the price slide began.

Oil prices had not fallen below $10 a barrel since 1977, when refiners were paying an average of $9.55 a barrel for domestic crude oil.

Futures contract prices for refined products, such as gasoline and heating oil, also fell today, furthering declines from Monday dealings.

Among contracts for April delivery, heating oil dropped sharply to 34.80 cents a gallon, down from 42.78 cents on Monday, caused partly by the blanket of warm spring weather over much of the country.