Oil Futures Prices Decline

Oil futures prices swung violently Monday, indicating the basic instability of the market, and closed sharply lower.

Heating oil led the charge on the New York Mercantile Exchange, first soaring to the highest ranges allowed for daily trading, then plunging close to the limit down.

There was virtually no fresh news to send prices careening from one extreme to the other, analysts said, although the opening strength was attributed to higher prices in London and cold weather both in Europe and the United States.

After fairly good buying early in the session, said John Hill, an analyst in New York with Merrill Lynch Commodities, “everybody looked around and said, ‘Hey, what are we doing owning this stuff!’ .”

“It was a very volatile market and it has to do with poor fundamentals,” said Ed Dellamonte, an analyst in New York with Prudential Bache Securities. “And it’s not going to go away for a long time. We’re going to see wide swings until we get some agreement for less production.”