Oil prices dive in late-session trade

Crude oil prices dived on Monday amid market speculation that the Obama administration would release strategic supplies to lower gasolines prices ahead of the November 6 election.Late in the New York Mercantile Exchange trading session, West Texas Intermediate (WTI), or light sweet crude, for October delivery tumbled by $4.35 a barrel from Fridays close.The benchmark WTI contract recovered to settle $2.38 lower at $96.62 a barrel.In London trade, Brent North Sea crude for delivery in November ended down $3.23 to close at $113.79, after falling by as much as $11.50 from Friday.Analysts scrambled to explain Mondays dramatic plunge.The weakness in crude oil has been attributed to a number of factors, including rumors of a strategic oil reserve release (which have since been denied by the White House), along with chatter of a potential fat-finger trade, in combination with light volume and a break of technical levels, Briefing.com analysts said in a client note.The market chatter on strategic petroleum reserves came as President Barack Obama faces a tight re-election race against Republican rival Mitt Romney, with the flagging economy at the top of voter concerns.I think the SPR is on the tongue of everybody at the White House, said Rich Ilczyszyn, chief market strategist at iiTrader.com.Traders on the floor do not want to buy crude at $90 because they are worried about that sucker punch of a SPR release that would hammer prices, he said.But Tim Evans at Citi Futures took a broader view of the sudden price drop.We think this was profit taking run amok by market bulls who became dissatisfied with the minor gains registered since the FOMC announcement on Thursday and recent protests around the Middle East, Evans said.Oil prices had surged on Friday to their highest levels since early May after the Federal Open Market Committee unveiled the plan to boost economic growth in the worlds largest crude-consuming nation.