Oil fell below $30 a barrel on the futures market Friday, as perceptions that war in the Persian Gulf would be delayed dragged crude to its lowest level in weeks.
"The whole thing looks like it's getting further and further away," said Brian Tagler, a broker with Shearson Lehman Brothers Inc.Light sweet crude settled at $29.78 per barrel, down $1.34, after falling as low as $29.25 for December delivery contracts at the New York Mercantile Exchange. Contracts for crude delivery in later months all traded lower, as did the rest of the energy futures traded on the exchange.
For the week, December crude fell $4.11 a barrel.
Crude for next-month delivery had last traded below $30 per barrel on Oct. 23, when oil hit as low as $28.30 before settling at $29.37.
Traders said the drop below $30 was having a psychological effect on the market, just as oil's rise above $40 had.
"It's a big number. Everybody looks at it," Tagler said.
The trading was partly technical, as traders liquidated their positions on the December contracts, which go off the board on Monday.
Otherwise, they were looking mostly at the bearish implications of news coming in from the Gulf.
The market was responding in part to an ABC-TV interview with Iraqi President Saddam Hussein, who said he wanted peace in the Middle East, as well as reports that Iraq had told Iranian leaders that it had not ruled out the idea of withdrawing from occupied Kuwait.
There have also been recent reports that the Egyptians, the Soviets and some members of Congress are urging President Bush to avoid an immediate confrontation.