Heating oil prices soar on Ida concern

10 November 2009

The price of heating oil contracts trading on the New York Mercantile Exchange rose three per cent during trading yesterday (November 9th), with suppliers and speculators concerned about supply as Hurricane Ida passed through the Gulf of Mexico.

Gains were witnessed throughout the electronic and physical trading day as investors reacted to the announcement that BP and Chevron would be cutting production ahead of the storm.

Later in the day, Murphy Oil, Marathon and Royal Dutch Shell also began evacuating platforms in the gulf.

Speaking to Bloomberg, Danny Holder, director of the Gulf of Mexico business unit for Bristow, a helicopter services group, commented: "We've been in evacuation mode all weekend for our customers and contractors offshore in the Gulf of Mexico and we continue that today."

Although wholesale heating oil prices climbed sharply yesterday, it would take some time for constricted supply conditions to have an effect on domestic heating oil prices.

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