Word of Persian Gulf Cease-Fire Sends Oil Futures Prices Soaring

Prices of oil futures surged Monday in moderate trading, lifted by the announcement of a cease-fire in the 8-year-old war between oil producers Iran and Iraq.

On the New York Mercantile Exchange, the contract for September delivery of West Texas Intermediate, the benchmark grade of U.S. crude oil, advanced 61 cents to close at $15.87 a barrel. A barrel is equivalent to 42 gallons.

Prices of refined oil products on the exchange also soared. Wholesale heating oil for September delivery jumped 1.46 cents a gallon to finish at 44.50 cents, while wholesale unleaded gasoline for September rose 1.42 cents to 46.65 cents.

U.N. Secretary-General Javier Perez de Cuellar announced that Iran and Iraq will begin a cease-fire in their Persian Gulf war Aug. 20.

The news followed days of intense diplomacy that ended a deadlock of nearly two weeks of U.N.-mediated truce talks.