Heating oil trades higher on China optimism

11 December 2009

Written by Bob Burton

Wholesale heating oil prices rose this morning (December 11th) after a sustained period of losses, with the latest industrial output and crude processing figures from China providing support for the commodity.

During the electronic session of the New York Mercantile Exchange this morning, heating oil traded broadly in line with crude oil futures, with both commodities supported by confidence in Asian growth.

Speaking to Bloomberg, Clarence Chu, a trader with options dealers Hudson Capital Energy in Singapore, commented: "The only sustainable demand is coming from China. Everyone agrees that the growth is coming from the non-OECD [Organisation for Economic Co-operation and Development] countries."

It remains to be seen whether the gains made in the early trading session will be sustained later today as western markets open, as confidence in US recovery prospects remains heavily sedated.

As the European trading session got underway, the front-month heating oil contract was trading around the $1.908 (£1.16) mark, up 0.5 cents on the gallon.

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