Oil Prices Decline Again

Oil prices tumbled again Wednesday, renewing expectations of continued low inflation and sending Treasury bond futures soaring to uncharted heights.

“It was a one-two punch for oil futures,” said Nauman Barakat, an analyst in New York with Smith Barney, Harris Upham & Co.

The more telling blow, perhaps, came from the Organization of Petroleum Exporting Countries meeting in Geneva, Switzerland, where ministers broke off their conference Wednesday to gather in small groups to search for some compromise that would raise oil prices. The likelihood of success appears minimal, Barakat said, and the assumption is that some ministers are pushing to break up the meeting now, while others want to wait a bit, fearing that an abrupt departure would be traumatic for oil prices.

The other blow delivered to oil futures at the New York Mercantile Exchange came from refinery data released late Tuesday by the American Petroleum Institute. The report showed refinery runs increased by 400,000 barrels a day.

“What this means is the supply of heating oil and gasoline will be increasing in the weeks ahead,” said Peter Beutel, an analyst in New York with Rudolf Wolff Energy.