Heating oil prices follow crude lower

17 August 2009

Heating oil prices moved lower in trading on the New York Mercantile Exchange (Nymex) this morning (August 17th), mimicking losses witnessed in crude futures.

Extending the sharp downward revision in prices witnessed on Friday (August 14th), the headline September-delivery heating oil contract weakened further in electronic trading, edging towards $1.80 (£1.10) a gallon ahead of the opening of the market in the US later today.

Wholesale heating oil prices had enjoyed a steady rise at the beginning of last week amid a raft of improved economic data from the US, China and Europe.

However, support for the rally - which was also witnessed in crude futures - was diminished as stocks and shares on the world's largest bourses began to pull back from yearly highs.

Meanwhile, consumer confidence data released on Friday by Reuters and the University of Michigan also caused a sharp downward revision of both crude and heating oil prices as traders reacted to an unexpectedly gloomy sentiment on Main Street.

If falls in wholesale heating oil prices are sustained, this could in turn translate to a drop in residential heating oil prices