A story in yesterday's Business section gave incorrect fuel- consumption figures for United Air Lines and the airline industry. United uses 2 billion gallons of jet fuel per year; the industry uses 12 billion gallons. (Published 12/24/87)

After more than a week of nervous trading that sent oil prices reeling, oil rebounded yesterday on reports that key Middle Eastern producers were moving to curb production and on news of increased hostilities in the Persian Gulf.

"Whether this is the start of a major uptrend or just a technical correction, it's too early to tell," said one oil futures broker.

The rebound contributed to dampening the stock market's year-end rally yesterday as the Dow Jones industrial average fell 11.93 at 1978.45. {Details on Page F2.}

On the New York Mercantile Exchange, contracts for February delivery of West Texas intermediate, a key crude oil, closed at $16.61 a barrel, up $1.21 from Monday's close. That was a major turnaround from last week, when oil prices fell $3 a barrel.

The indication that oil prices might be stabilizing, or even improving, could be bad news for oil consumers, set to enjoy another price break in the wake of the Organization of Petroleum Exporting Countries' unproductive meeting earlier this month.

But oil producers, who feel they suffered enough in the oil price collapse of 1986, could take heart.

If sustained, the price increase would be a source of cheer for the state of Texas, which depends on taxes on oil and gas for 11.5 percent of its tax revenue. State budget specialists had made what they believed was a conservative oil price forecast for the current fiscal year, which began Sept. 1, anticipating an average price of $17.40 a barrel.

"Since we had built in downward movement anyway, at this point we'll just have to wait and see," said Patty Leo, an oil analyst for the state comptroller's office. "People forecasting for the state tend to be on the conservative side. Once the money is committed to be spent by the state legislature, we don't want to be short."

Last week, as oil prices were falling, the forecast looked much closer to the mark than the forecaster intended.

"We have an assumption built in that oil prices will go down to $16 for April," said Tom Plaut, a senior economist in the same office. "As long as oil prices remain in that range, we are assuming the recovery will continue."

The Texas economy hit bottom last summer, state budget officials believe. Since then, employment has increased, and the signs for 1988 have been promising compared with the disaster the state has been living through. Texas officials are forecasting an increase in the gross state product after two years of decline.

Good news for Texas, however, could be bad news for United Air Lines, which buys two billion barrels of jet fuel a year, as well as for other air carriers. For every one cent per gallon decline in the price of jet fuel, United saves approximately $22 million a year, according to airline spokesman Matt Gonring. Each $1 drop in the price of crude oil translates into about a three-cent decrease in jet fuel price, analysts say. Although United stepped up purchases of fuel on the spot market because of the recent decline in oil prices, much of the airline's consumption is from oil bought under longer-range contracts.

The airline industry, which uses about 12 billion barrels of oil a year, began raising fares last summer to help offset rising fuel costs.

Those increases now are expected to help improve industry profit yields, which were low in 1986. "Yields should be better," said George James of Airline Economics, a trade publication. James said he anticipates an industry-wide increase in yield of 1 percent in 1987 and 3 percent in 1988.

At that level, the increase still is expected to be less than the anticipated increase in the consumer price index, he said.

Oil prices are likely to help determine the rate of inflation, however. Recent predictions that oil prices probably would remain at or below the $18 a barrel official OPEC price have been accompanied by forecasts that the economy could continue to expand with less chance of triggering painful inflation.

The recent history of oil prices has been one of volatility in a market that has dispensed painful shocks in the last 15 years to both buyers and sellers. As a result, both sides have learned a little bit about cushioning the impact of rapid changes in either direction.

Major integrated oil companies that are both producers and refiners and marketers suffer from lower prices as they sell oil products and benefit as they buy, but generally suffering dominates the mix. Companies with extensive debt, which represents a high fixed cost, suffer more from lower prices.

For instance, companies such as Phillips Petroleum Co. and Unocal Corp., which incurred debt in the course of restructurings in recent years, must continue to pay interest on that debt with reduced oil revenue if oil prices go down.

Crown Central Petroleum Corp., which is headquartered in Baltimore, announced earlier this year that it had agreed to sell its oil and gas exploration and production division to focus on its retailing operations. In the long run, if oil prices continue to decline, consumers should benefit. But William R. Snyder, vice president for administration, cautioned, "There is not always a direct correlation between lower crude prices and the price on the street. You have to keep in mind that margins have been thinner than needed to receive a decent return on investment.

"Sometimes in a down market, you might recapture margins that have been lost," he said. But he added that intense competition may not allow refiners and marketers that luxury.

Utility officials said that a lower price of oil probably would not have much impact on prices of gas and electricity. Only about 10 percent of Potomac Electric Power Co.'s fuel costs are for oil, according to Charles Nicolson of Pepco. The company depends on coal for the rest of its fuel needs. Coal prices sometimes drop in response to a decline in oil prices, but "for oil to be competitive with coal, it has got to go down to roughly $10 a barrel," he said.

James W. Freeman, vice president for marketing and research at Washington Gas Light Co., said lower oil prices might push natural gas prices lower as competition intensifies for industrial customers who can easily switch from natural gas back to oil.