Oil Prices Hit 21-Month Low on Fears of Glut : U.S. Imports, Meanwhile, Soar in First Half of Year

Crude oil prices skidded to a 21-month low Wednesday as traders grew more pessimistic about overproduction by OPEC members.

On the New York Mercantile Exchange, the August delivery price of West Texas Intermediate crude, which fell 6 cents on Tuesday, fell an additional 28 cents to close at $14.44 a 42-gallon barrel.

The last time prices for the near-month contract were lower was Oct. 29, 1986, when they closed at $13.73 a barrel.

Fears of continued overproduction by the Organization of Petroleum Exporting Countries sent prices lower, said Andrew Lebow, senior broker and analyst at E. D. & F. Man International Futures Inc.

“It’s the same type of scenario that’s burdened the market for the last couple of weeks,” he said.

In another energy development, the American Petroleum Institute reported Wednesday that the U.S. appetite for foreign oil increased sharply in the first half of the year, while domestic crude production kept declining.

The report showed that U.S. imports of crude oil and petroleum products jumped 14.1% in the first six months of the year from the same period in 1987. The nation’s total oil imports rose to an average 6.93 million barrels a day from 6.07 million barrels.

The rising imports mean that 41% of the oil consumed in this country is now imported, noted the monthly statistical report by the Washington-based trade group.

The spike in imports in the first half was in part the result of differences in oil stocking between this year and 1987, the report said.

It nevertheless “continues a very disturbing trend toward increased reliance on foreign sources of petroleum for our basic energy needs,” said Edward H. Murphy, director of the group’s finance, accounting and statistics department.

Domestic crude production, on the other hand, slipped 2.3% during the January-June period, to an average 8.2 million barrels a day.

The report blamed the production decline largely on the fall in world oil prices since 1986, which it said has pushed crude prices 40% lower than before the slide.

The decline in crude output has been in part offset by a slow but steady increase in Alaskan production as a result of projects planned many years ago coming onstream in the past two years.

Meanwhile, on the Merc, wholesale unleaded gasoline, which fared better in recent weeks than oil because of increased demand during the summer driving season, fell on profit taking, Lebow said.

There also were rumors that importers were buying foreign gasoline, which could ease tight supplies.

The August contract for wholesale unleaded tumbled 3 cents to close at 50.48 cents a gallon on the Merc.

Home heating oil traded on the exchange slipped 0.51 cent to 40.14 cents a gallon.