Oil Prices Skid on Word of More Output

Energy futures prices plunged Monday amid new reports of rising oil production and possible new sources of imported gasoline.

The June contract for West Texas Intermediate, the benchmark U.S. grade of crude oil, fell 71 cents a barrel on the New York Mercantile Exchange, closing the day at $20.61. Other contract months closed as much as 79 cents lower.

Analysts said a report shortly after midday EDT that some members of the Organization of Petroleum Exporting Countries were boosting production to take advantage of rising crude prices triggered a selloff.

Ed Ryan, energy analyst with Dean Witter Reynolds Inc., said the market had been “nervously quiet” until then.

“When the statement came from OPEC that it was increasing its production, that triggered profit taking,” Ryan said.

OPEC is believed to be producing about 20.5 million barrels a day, 2 million above its self-imposed quota. Since it established the quota last November to boost world oil prices, crude prices have risen more than 60%.

Many investors also were jittery in the absence of new information about the resumption of North Sea oil production after last week’s gas explosion.

News of the accident last Tuesday sent crude prices soaring more than $3 a barrel to a three-year high. The accident disrupted the flow of Brent crude through a major pipeline, which affected the production of at least 500,000 barrels.

The North Sea disruption compounded fears of an already tight gasoline supply situation at the onset of the driving season. Analysts said a decision Friday by the Environmental Protection Agency giving Massachusetts until June to impose new higher octane regulations also helped soften prices.