ENERGY : Crude Prices Briefly Touch 5-Month Low

Oil prices fell briefly Thursday to their lowest level since the day after Iraq invaded Kuwait, as President Bush announced a final attempt to persuade the Iraqis to peacefully vacate the oil-rich emirate.

Light sweet crude for February delivery fell as low as $24.90 per barrel on the New York Mercantile Exchange amid perceptions that a last-minute diplomatic solution to the Persian Gulf crisis might be possible.

Crude had not been below $25 per barrel for next-month delivery since Aug. 3, the day after the invasion, when it was $24.49.

After the sharp drop, which followed Wednesday’s fall of $1.95 per barrel, crude inched back up to $25.48, down $1.01 for the day.

Crude’s decline Thursday came after Bush took what he called “one extra step” toward direct U.S.-Iraqi talks, proposing a meeting next week between Secretary of State James A. Baker III and Iraqi Foreign Minister Tariq Aziz. Iraq said it was studying the offer.

In addition to the peace initiative, ample oil supplies in the world market were responsible for the dip in oil prices.

“The market’s recognizing we’ve got lots of oil around here, and the concerns about supply disruptions are not as bad,” said Bob Baker, an oil analyst with Prudential-Bache Securities Inc.

Oil prices hit an all-time high at the Mercantile Exchange of $41.15 per barrel Oct. 10, but have since lost most of the so-called war premium.

Prices for other energy futures in New York also took sizable losses for the second straight trading session.

The average price nationwide of a gallon of self-serve unleaded regular was $1.267, the American Automobile Assn. said Thursday. It was the lowest price in AAA’s weekly survey since Aug. 20, when a gallon of self-serve unleaded averaged $1.237.