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Oil prices tumble, again
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August 10, 1998: 4:58 p.m. ET
Supply glut, fissures in production-cut accord sends oil futures sharply lower
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NEW YORK (CNNfn) - A glut of oil worldwide and the inability of producers to keep to agreed-upon production cuts sent oil futures prices reeling Monday, as futures blew past previous contract lows.
The Nymex crude oil futures contract for delivery in September ended down 75 cents at $13.05 a barrel, up just three cents from the session low Monday.
Trading in that contract, the most-active month, opened the day slightly lower but then selling accelerated around 10 a.m., as support evaporated at former contract low of $13.54 a barrel.
The plunge came in the first day of Nymex trading since Friday's data by the International Energy Agency showed crude oil stocks hit record highs of 2.79 billion barrels in June.
The IEA report also showed a fissure in accords by members of the Organization of Petroleum Exporting Countries inked in June to cut their output by 2.6 million per day in July. But those numbers showed cutbacks amounting to just 1.4 million barrels a day.
Every OPEC nation, including some top producers such as Saudi Arabia, Venezuela and Kuwait, failed to hold to the agreed quotas.
One analyst said there is little sign oil prices will be coming back anytime soon in the wake of that IEA report.
"They really got hammered today," said Stephen Langan, chief investment officer at Fordham Financial Management. "And they are going to stay down until the weather starts getting cold again, and they may bottom out as low as $12 per barrel."
"Nothing is going to lift crude except the weather, unless there is some craziness in the Middle East," he said.
To head off any such craziness, U.N Secretary General Kofi Annan on Monday tried to head off a further outbreak of tensions between the U.N. Security Council and Iraq over arms inspections.
Annan pressed Iraq to hold to promises it made to him earlier this year amid a similar outcropping of tensions over the inspections. 
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