Oil Has Roller Coaster Trading Day : Commodities: The price of crude swings wildly before closing nearly unchanged. Several news reports are behind the volatility.
In a volatile trading day, crude oil prices plunged below $35 a barrel Thursday on news that Iraq was hawking cheap oil, zoomed back over $37 a barrel on word of more shootings of Palestinians in Israeli-occupied territory, then closed practically unchanged from the day before.
Light sweet crude oil for November delivery settled up only 8 cents a barrel at $36.80 in trading on the New York Mercantile Exchange. Prices for oil in later months closed mixed, with December and January contracts down about half a dollar.
At one point, November crude oil prices traded as low as $34.40 a barrel, their lowest since Oct. 3. Just a week ago, the same contract traded above $41 a barrel, the highest ever.
The wide swing Thursday underscored the market’s continuing volatility as the Middle East crisis continues.
“Today was a bigger roller coaster than just about any day this past week,” said Randall Rothenberg, a broker with Dean Witter International Energy Futures in New York.
Traders have said Middle East news, rumors and war fears have driven the oil markets more than the fundamentals of world supply or demand in the weeks since the Aug. 2 invasion of Kuwait.
On the opening Thursday, it appeared that oil prices were going to continue the strong fall of the day before, when prices dropped more than $2 a barrel on an easing of war tension.
Prices fell on news that Iraq was offering to sell oil for the pre-invasion price of $21 a barrel, promising not to touch the money until the crisis is resolved. A worldwide embargo has kept all Iraqi and Kuwaiti crude oil off world markets.
U.S. officials quickly said the embargo would apply to any Iraqi oil sold through the offer. But traders, looking for an excuse to trade crude down, nevertheless sold off oil contracts.
Prices also fell on further news indicating that worldwide supplies of crude oil remain adequate, despite the embargoes.
The Department of Energy on Thursday revised its estimate of the worldwide shortfall of crude oil. It said that by November new production from Saudi Arabia and other nations would make up for all but 500,000 barrels a day of the 4.3-million daily barrels of Iraqi and Kuwaiti crude lost under the embargo.
On Thursday, an official of the International Energy Agency said world oil supplies have already returned practically to pre-crisis levels.
Late in the day, prices began to spike sharply on news that Israeli police had again fired upon demonstrating Palestinians, this time in the Gaza Strip. Word of the shootings rekindled fears of war, which could mean worldwide shortages of crude.
Just before closing, prices regained all of the ground lost in the preceding hours.
Prices of refined products also fell Thursday. Unleaded gasoline for November delivery was off 0.44 cents at 92.96 cents a gallon. Heating oil for November delivery closed down 1.74 cents at 96.51 cents a gallon. Prices for products for later delivery were also down.
