Tumbling oil prices pumped new life into Treasuries yesterday, but fears of strong news on the economy siphoned most of the pins out.

Prices ended narrowly mixed, with the 30-year bond closing up 1/4 point to yield 6.22%. The benchmark issue was as much as a point higher during the session.

Positive news on the energy front prompted a sigh-of-relief rally overseas and in early New York trading. But the market ran out of gas when concerns that this week's round of economic indicators will resurrect the trend toward higher long-term rates got the best of investors.

The market's gains stemmed from the Organization of Petroleum Exporting Countries' failure to cut production and Iraq's apparent progress m convincing the United Nations to lift the post-Gulf War sales embargo.

The events pushed crude prices lower and Treasury prices higher. Most of the gains reflected dealer short-covering and speculative buying with no interest from retail accounts. Lack of follow-through buying led to profit taking late in the session.

"The drop in oil prices put a lot of the inflationary expectations to rest and was the real news of the day," said James Somers, president of Somers Asset Management Inc. in Radnor, Pa.

The Commodity Research Bureau's Index of 21 futures fell more than three points, led by sinking energy prices and sharply lower precious metal prices. The widely watched CRB Index was down 3.06 to 220.00, its lowest level since mid-November.

Preoccupied by plunging commodity prices, market participants took little notice of strong news on the economy when the National Association of Realtors reported that U.S. existing homes sales rose 3.6% in October to a seasonally adjusted annual rate of 4.08 million units.

The October reading was the highest level of sales in more than 14 years and followed a revised 3.4% increase in September, earlier reported up 2.6%, and a 1.3% decline in August.

Michael Moran, chief economist at Daiwa Securities America, said the report provided further evidence that the interest rate sensitive sectors of the economy are growing faster. However, positive developments in energy markets and the fact that the market already priced in a solid fourth quarter tempered the impact of the report, he said.

The relative strength of the economy, evidenced by yesterday's home sales figures, continues to pose problems for fixed-income market players as they begin to set their investment compasses for 1994. While questions remain about whether the recent acceleration of U.S. economic activity is sustainable in the long term, players agree that in the short term the market is in for a bumpy ride.

There is no drought of statistics this week and market observers will scrutinize each one for clues about where the economy is headed.

The key focus will be Friday's employment report, which will provide market participants with their first comprehensive view of the economy's performance in November. Economists polled by The Bond Buyer generally expect an increase of 180,000 nonfarm jobs.

Other releases include November consumer confidence, the November National Association of Purchasing Managers' survey, and the first revision to third-quarter gross domestic product growth.

Forecasts for upcoming economic statistics continue to bear the mark of recovery. According to 34 forecasters surveyed by the Federal Reserve Bank of Philadelphia, the short-term outlook for economic growth has improved since last quarter's survey.

The forecasters see real GDP growing at 2.8% in 1993, up 0.4 percentage point from the last survey. Average growth in 1994 is also expected to be 2.8%, unchanged from the previous survey. According to the forecasters, stronger fourth-quarter growth this year will not affect the unemployment rate, which they believe will continue to average 6.9% in 1993 and 6.6% in 1994.

The inflation outlook through 1994 has improved from three months ago. Over the next five quarters, the consumer price index is seen holding steady at 3.0%, down from 3.3% in the last survey. Inflation is expected to average 2.9% in 1993 and 3.0% in 1994, both down 0.2 percentage point from the last survey.

Euphoria over lower oil prices and flight-to-quality buying from foreign accounts helped draw solid demand yesterday for the Treasury Department's weekly three- and six-month bill auctions. The issues averaged rates of 3.12% and 3.26%, respectively. The impressive bid-to-cover ratios of 4.51 for the three-month and 4.04 for the six-month reflected smaller auction volumes.

In futures, the December contract ended down 12/32 to 119.10.

In the cash markets, the 41/4% two-year note was quoted late yesterday down 1/32 at 100.05-100.06 to yield 4.15%, the 5 1/8% five-year note ended Up /32 at 100.05-100.07 to yield 5.07%, the 5 3/4% 10-year note was up 1/32 at 100.00-100.04 to yield 5.73%, and the 6 1/4% 30-year bond was up 1/4 at 100.06-100.10 to yield 6.22%. Treasury Market Yields Prev. Prev. Monday Week Month3-Month Bill 3.12 3.13 3.106-Month Bill 3.27 3.30 3.311-Year Bill 3.46 3.50 3.492-Year Note 4.15 4.21 4.093-Year Note 4.46 4.59 4.365-Year Note 5.07 5.19 5.017-Year Note 5.28 6.42 5.001-Year Note 5.73 5.88 5.2230-Year Bond 6.22 6.37 6.19Source: Cantor, Fitzgerald/Telerate

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