Gasoline shifted into reverse an expected surge in crude oil prices Friday as a snowstorm sent many confused traders home early amid mixed war-peace signals from the Middle East, precipitating a decline in prices down late in the day.
Traders also were still bailing out of buy positions they were "trapped" in during Wednesday's 10 minute, $7 a-barrel rise when Secretary of State James Baker announced peace talks with Iraqi Foreign Minister Triz Aziz had failed, said Ray Mazzeo of Lehman Brothers' International Energy Dept. in New York.Because of the quickness of the rise, many found their orders had been executed several dollars higher than when they were made, Mazzeo said.
On the New York Mercantile Exchange, the world's largest trader of future-delivery oil contracts, the benchmark West Texas Intermediate crude for February delivery ended the day down 42 cents at $27.29 a barrel, still $2.39 higher than a week ago.
Trading volume was a moderate 72,606 contracts.
The WTI crude had been expected to surge on war fears to more than $30 a barrel in the few days leading up to U.N. Jan. 15 deadline for Iraq's withdrawal from Kuwait, occupied since the Aug. 2 invasion.
"The market did nothing until late in the day," said Tom Bentz, director of trading at United Energy Inc. in New York.
The market's uncertainty was fed by "conflicting news" on the Persian Gulf crisis, Bentz said.