Oil prices retreated in active trading Tuesday after a sharp run-up sparked by a major Alaskan oil spill.
Analysts blamed the decline--which included a drop of more than 2 cents a gallon for home heating oil--largely on profit taking and concerns about whether OPEC ministers will ease production restraints during their meeting in Vienna this week.
On the New York Mercantile Exchange, the May contract for West Texas Intermediate, the benchmark grade of U.S. crude, settled at $19.91 a barrel, down 62 cents from Monday’s close.
The near-month contract had risen 38 cents a barrel Monday to close at $20.53, the highest level since Aug. 14, 1987, when it settled at $20.57.
Among refined petroleum products traded on the exchange Tuesday, the April contract for wholesale home heating oil plunged 2.54 cents to 55.04 cents a gallon, after rising 1.06 cents Monday.
April unleaded gasoline, which gained 1.73 cents in the previous session, settled down 1.07 cents to 58.68 cents a gallon.
Monday’s rally was triggered by the accident off the Alaskan port of Valdez, where an Exxon tanker ran aground and spilled an estimated 10.1 million gallons of crude oil into Prince William Sound. The accident forced the closing of the port, temporarily cutting U.S. crude supplies by a quarter.
Peter Beutel, an energy analyst at Elders Futures Inc., said the market sold off Tuesday because prices had risen too high, too fast in the previous session.
“I think the market was overbought,” he said. “People are now cashing in.”
Also depressing oil prices were worries that the Organization of Petroleum Exporting Countries might loosen its production quota to help slow recent price increases at its regular meeting in Vienna.