Cease-Fire Gets a Second Look; Oil Futures Fall

Prices of oil futures fell Tuesday as earlier optimism about the impact of an impending cease-fire between Iran and Iraq turned sour.

On the New York Mercantile Exchange, the contract for September delivery of West Texas Intermediate, the benchmark U.S. crude oil, declined 19 cents to close at $15.68 a barrel. The September crude contract had jumped 61 cents a barrel Monday.

A barrel is equivalent to 42 gallons.

Prices of refined oil products on the exchange also retreated. Wholesale heating oil for September delivery lost 0.43 cent a gallon to finish at 44.07 cents, while wholesale unleaded gasoline for September fell 0.50 cent to 46.15 cents.

Oil futures had been lifted Monday on a wave of optimism sparked by U.N. Secretary General Javier Perez de Cuellar’s announcement that Iran and Iraq will begin a cease-fire in their 8-year-old war on Aug. 20.

Many traders believed that the cease-fire would lead to more cohesion within the 13-nation Organization of Petroleum Exporting Countries, of which Iran and Iraq are members, cutting down on overproduction by them and other OPEC members.