Heating oil hovering above $2

13 November 2009

Wholesale heating oil prices on the New York Mercantile Exchange were teetering above $2 (€1.34) a gallon during the Asian trading session this morning (November 13th).

A relative strengthening in heating oil prices came after sharp losses yesterday witnessed in all petroleum commodities.

Crude oil prices suffered as the dollar enjoyed a three-day rally which made commodities such as oil and gold less attractive, particularly to foreign buyers.

However, the currency's rise has been broadly recognised as a bear-market rally precipitated only by a round of profit taking in other high-yield currencies and not linked to a fundamental strengthening in the US economy.

Toby Hassall, a research analyst at CWA Global Markets in Sydney, told Bloomberg that demand for petroleum products in the US is still yet to recover.

"There is a lot of uncertainty as to what we can expect with the rate of recovery in Western oil demand, particularly the US," he commented.

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