Commodities : Oil Market Jitters Subside

Oil futures prices eased Thursday as rumors circulated at the New York Mercantile Exchange that Iran and Iraq might avoid attacking ships in the Persian Gulf.

Some analysts said, however, that the market was basking in a false sense of security about the reflagged oil vessels sailing under the protection of U.S. warships.

On other markets, livestock and meat futures were mostly lower; grain and soybeans were mostly lower; and precious metals were mixed.

The rumors at the Mercantile Exchange may have had their origin in a statement made by Iran’s foreign minister, Aki Akbar Velayati, that “if Iranian ships are not subjected to attack, if no ships are attacked by the Iraqis, no ships will be attacked in the Persian Gulf.”

The rumors had it that Iraq agreed to abstain, said Nauman Barakat, an analyst in New York with Smith Barney, Harris Upham & Co.

“But Iraq wouldn’t agree to this,” he said, “because Iran is totally dependent on shipping -- it has no pipelines.”

Nonetheless, the market developed some weakness because it appeared that Gulf tensions might be dissipating, he said.