Commodities : Thursday, Jan. 16, 1986 : Petroleum Futures Decline

Petroleum futures prices took a nosedive Thursday with crude and heating oil hitting their lowest levels of the 1980s.

Oversupply and mild weather appear to be the basic factors behind the plunge, analysts said.

Many contracts of crude and heating oil dropped the limit for daily trading on the New York Mercantile Exchange, which said prices haven’t been so low since the late 1970s.

The crude oil contract for February, on which there is no daily limit, settled at $24.11 a barrel, down $1.04. After the close, the exchange expanded daily trading limits to $1.50 from $1 for crude and to 3 cents from 2 cents for heating oil and other products.

Analyst Peter Beutel of Rudolf Wolff Engery in New York cited a report that Saudi Arabia produced 6 million barrels of crude oil a day during the first week of this month, which he said was the highest level since 1979-80.

“There are overhanging bearish fundamentals that are not going to disappear for a long, long time,” said Ed Dellamonte, an analyst in New York with Prudential-Bache Securities.