Commodities : Tuesday, Aug. 5, 1986 : Oil Futures Soar Again
Petroleum and energy futures prices soared for a second straight day Tuesday at the New York Mercantile Exchange on the news the OPEC oil cartel had firmed up an agreement to return production quotas near their 1984 levels.
“There was absolutely more confidence . . . more people around today that believe the agreement is going to work,” said Ed Dellamonte, analyst with Prudential-Bache Securities in New York.
In other markets, the skyrocketing oil prices helped pressure Treasury bond futures and failed to carry gold forward, while livestock and meat futures, as well as grain and soybean prices, were mostly lower. In a communique issued Tuesday after the Organization of Petroleum Exporting Countries’ 13 oil ministers ended a nine-day conference, the cartel said it was returning to 1984 levels to remove more than 3 million barrels a day from the glutted world oil markets.
About 20 million barrels are now produced each day.
The cuts scheduled for Sept. 1 are designed to reverse a worldwide slump in prices, which have dropped from about $32 a 42-gallon barrel late last year to as low as $8 for some grades.
