Commodities Wednesday, Jan. 22, 1986 : Oil Futures Take a Breather
The wild decline in oil prices was reined in Wednesday, and while most contracts were lower, it was a temporary breather in a market that has plunged to its lowest level of the decade.
The contract in crude oil for delivery in March retreated by 42 cents a barrel, but trading at the New York Mercantile Exchange was listless in comparison to the last week.
On Tuesday, the March contract touched the $1.50 limit decline for daily trading and a record 42,637 crude oil contracts were traded, twice the amount on Wednesday.
“They were licking their wounds, recovering from the craziness we’ve had,” said Peter Beutel, an analyst in New York with Rudolf Wolff Energy.
“But it’s just a matter of regaining their strength before they go at it again,” he said.
The basic reason behind the plunge remains unchanged, an abundant supply on hand and too much crude oil being produced, versus a mild winter and diminished demand.
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