Heating oil surges on Nymex

22 October 2009

Wholesale heating oil prices rebounded dramatically yesterday (October 21st) after slumping earlier in the week.

The November-delivery heating oil contract trading on the New York Mercantile Exchange (Nymex) had risen as high as $2.12 (£1.27) by 13:15 Eastern Time, up more than seven cents on its opening price.

The upward trend - which was also witnessed in crude futures trading on the Nymex - was largely precipitated by the latest demand figures from the Energy Information Administration.

Both heating oil and gasoline inventories registered unexpected declines in the US last week, suggesting a recovery in domestic, commercial and industrial demand for oil products.

Speaking to Bloomberg, John Kilduff, senior vice-president of energy at MF Global in New York, said the unexpected surge in sales of gasoline products in particular had "changed the landscape" for energy demand in the US.

Over time, increased demand for products such as heating oil and gasoline is likely to lead to a rise in costs for consumers, although buying in bulk ahead of the winter season may be an effective way to avoid the effects of spikes in heating oil demand.

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