Diplomacy Rumor Lowers Oil Prices

NEW YORK — Oil prices tumbled today to their lowest levels since the day after Iraq invaded Kuwait, as traders responded to more speculation of a peaceful solution to the Persian Gulf crisis.

Late this morning on the New York Mercantile Exchange, light sweet crude oil for delivery in February fell as low as $24.90 per barrel. Crude had not been below $25 per barrel for next-month delivery since Aug. 3, the day after the invasion, when oil settled at $24.49 a barrel, the exchange said.

Shortly before noon, oil was at $25.05, down $1.44 per barrel from the previous close. Today’s decline followed oil’s drop of $1.95 per barrel on Wednesday, which was also rooted in hints of diplomacy in the Middle East.

Traders were responding to news of a possible top-level diplomatic meeting between U.S. and Iraqi officials, with just 12 days to go until the U.N. deadline for Iraqi President Saddam Hussein to pull his troops out of oil-rich Kuwait.