Heating oil snaps two days of gains

2 December 2009

Heating oil prices retreated on two days of gains during the Asian trading session this morning, reacting to data showing persistently weak demand for the fuel.

According to figures from the American Petroleum Institute (API), heating oil stocks rose last week alongside crude and gasoline inventories, demonstrating persistent weakness in demand.

Heating oil stocks typically fall during the winter months in response to rising seasonal demand, but the latest API demonstrate that this year consumers may be looking to rein in their spending on heating oil despite the colder weather.

Commodities traders will now be turning their attention to data due out later today from the Energy Information Administration which will give a further indication of how demand is faring in the US, the world's largest energy consumer.

Speaking to Reuters, ANZ's senior commodities analyst Mark Pervan, commented: "A lot now depends on forecast updates of the US winter season and the resilience of the US equity market."

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