Oil Dips Below $18 a Barrel

Oil prices closed below the critical $18-a-barrel mark Tuesday on the New York Mercantile Exchange for the first time in nearly six weeks in face of jitters over the U.S. oil surplus.

But oil traded on the international market inched higher after the Soviet Union disclosed that it agreed to rent three oil tankers to Kuwait and is ready to provide an armed naval escort to prevent Iranian attacks on the vessels.

West Texas Intermediate, the benchmark U.S. crude for immediate delivery, lost 3 cents to $17.98 a barrel. The crude last finished below the $18 level on March 5, when it closed at $17.75 a barrel.

During the day’s trading on the Merc, West Texas Intermediate fell as low as $17.77 a barrel.

On the U.S. Gulf Coast spot market, where oil is sold to the highest bidder, West Texas Intermediate sank 15 cents to $17.80 a barrel.

In December the Organization of Petroleum Exporting Countries set an oil price target of $18 a barrel for 1987 by agreeing to cut back production and to return to an official pricing system.

Unleaded gasoline for May delivery on the Merc declined by 0.59 cent to 49.98 cents a gallon, and home heating oil slipped by 0.36 cent to 46.67 cents.