Commodities : Monday, Aug 4, 1986 : Petroleum Prices Advance

Petroleum and energy futures prices soared on record trading volume Monday at the New York Mercantile Exchange in response to news that the OPEC oil cartel appeared headed for agreement on a plan to prop up sagging oil prices.

After oil trading was done on the New York exchange, OPEC President Rilwanu Lukman said the cartel’s ministers reached unanimous agreement Monday night in Geneva on Iran’s proposal for a drastic production cut to raise prices.

In other markets, livestock and meat futures turned in a mixed performance.

Grain and soybeans were mostly lower, and gold failed to catch a ride on oil’s upward swing.

The frenzied move in energy futures came amid reports of wide-ranging support among OPEC’s 13 members for an Iranian proposal that would effectively slash oil production to about 16.7 million barrels a day from the current level of more than 20 million barrels.

“The market was ready to put the nails in OPEC’s coffin and they jumped back to their radical old quotas,” said Richard Marose, an analyst with Geldermann Inc. in Chicago.