Demand the matador to bullish oil traders

9 March 2010

Written by Kim Bardsley

Crude and heating oil prices were down this morning (March 9th) amid widespread expectations that demand reports due out this week will reveal persistent weakness in fuel consumption.

During the electronic trading session of the New York Mercantile Exchange this morning, crude prices retreated from an eight-week high of $82.41 (£54.90) a barrel, while heating oil prices were back below the $2.10-a-gallon mark.

Both commodities suffered as a poll by Reuters revealed that US crude inventories probably rose for a sixth consecutive week last week.

The survey came ahead of key demand reports from the American Petroleum Institute and the Energy Information Administration, due out today and tomorrow respectively.

"The whole market picture is still very weak, but sentiment has been very bullish," said Clarence Chu, an energy trader at Hudson Capital Energy in Singapore.

He added that prices above $83 do not appear to be sustainable while demand conditions are so weak.

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