Oil prices resumed their free-fall yesterday, plummeting toward $17 a barrel for the first time since early 1979, amid fresh warnings by leaders of the Organization of Petroleum Exporting Countries that there was little chance of avoiding "a major price collapse."

A key crude oil from Britain's North Sea skidded to $16.85 per barrel in London markets, the price offered for contracts for March delivery. On the New York Mercantile Exchange, the so-called benchmark U.S. crude oil dropped $1.47 to $17.36 a barrel for March delivery.

That is a collapse of 44 percent since late November, when the price of West Texas Intermediate crude oil for future delivery was $31 a barrel.

Yesterday's renewed sharp falloff in prices after several days of relative stability was apparently touched off by the published remarks of Saudi Oil Minister Ahmed Zaki Yamani that he sees no chance of an agreement with non-OPEC nations to limit oil production.

Later, after a special OPEC committee meeting in Vienna, OPEC President Arturo Hernandez Gri santi of Venezuela warned that the only alternative to production "restraint" by all oil-producing nations was "a major price collapse."

On the Mercantile Exchange, prices for future deliveries of crude dipped to $17.05 at one point yesterday before settling at $17.36 a barrel. Meanwhile, at least five major U.S. producers -- Exxon, Conoco, Arco, Phillips Petroleum and Texaco -- again cut the prices they will pay for crude oil on a contract basis.