...TC Crude oil prices dropped sharply yesterday on the hint of peace.
In trading on the New York Mercantile Exchange, crude for delivery next month closed at $37.09 a barrel, down $2.42, one of the steepest one-day drops in recent weeks. The low for the day was $35.85.
Gasoline and heating oil also were sharply lower. Considering the trading range yesterday, the volume was light, floor brokers said.
The market opened lower, following the lead set by trading in London. Prices dropped there in response to a speech by President Saddam Hussein of Iraq over the weekend that traders took as conciliatory.
Then President Bush, speaking at the United Nations yesterday, said, "We seek a peaceful outcome, a diplomatic outcome," and the price went lower still.
"It just looks like there's been some sort of a shift in U.S. policy," said Bradford H. Hughes, a trader at Cargill Investor Services Inc. "It's a change in Bush's attitude; he seems a little more open. When Bush made the speech, the bottom fell out of the market."
Market participants did not cite the weekend accord on the federal budget, which included heavy taxes on gasoline, as a factor yesterday. But some noted that the House of Representatives voted Friday to allow the sale of 15 million barrels of oil from the Strategic Petroleum Reserve.
Gasoline fell 4.8 cents a gallon yesterday, to 93.91 cents. Heating oil was down even more sharply, by 5.89 cents, to $1.0003 a gallon.