Oil and precious metal futures prices fell sharply Friday amid Middle East peace hopes driven by Iraq's conditional offer to withdraw from Kuwait.
"We saw the first sign that Saddam Hussein may be starting to cave in a little," said Anne Orton, vice president of Deak International Inc., a New York-based dealer in currencies and metals.On other commodity markets, orange juice futures crashed; livestock and meat futures were mixed; and grains and soybeans were mostly higher.
Light sweet crude oil futures settled 45 cents to $1.55 lower on the New York Mercantile Exchange with the contract for delivery in March at $20.88 a barrel; home heating oil was 1.9 cents to 3.63 cents lower with March at 62.32 cents a gallon; unleaded gasoline was 1.3 cents to 2.6 cents lower with March at 58.99 cents a gallon; natural gas was 0.6 cent lower to 1.8 cents higher with March at $1.385 per 1,000 cubic feet.
In precious metals trading on New York's Commodity Exchange, gold futures finished $3.80 to $4.10 lower with February at $364.40 per troy ounce; silver was 4.3 cents to 4.9 cents lower with March at $3.78 a troy ounce.
President Bush and other allied leaders quickly rejected Iraq's offer as not meeting the United Nations' requirement of an unconditional withdrawal.
But in the oil and metal markets it was perceived as "a slight opening in the door," said William O'Neill, senior futures strategist with Merrill Lynch Futures.
"It may be the harbinger of some potential settlement, even though the proposal was entirely unacceptable," he said.