Heating oil prices lower on dollar

17 December 2009

Written by Bob Burton

Heating oil prices were down this morning as the dollar rose to a three-month high against the euro.

Wholesale heating oil prices moved lower on the New York Mercantile Exchange this morning (December 17th), paring gains made yesterday on the back of strong demand figures.

The losses this morning came as the dollar moved to a three-month high against the euro, making dollar-priced commodities such as crude and heating oil less attractive to foreign buyers.

Despite losses, the front-month heating oil contract held above $1.95 (€1.35) in the Asian session, still up around four cents on Tuesday's settle price.

Crude oil prices also moved lower this morning after registering strong gains late yesterday following the publication of the latest demand figures from the Energy Information Administration.

However, speaking to Reuters, Tony Nunan, a risk manager with Tokyo-based Mitsubishi Corp, warned: "We still have a lot of inventory and fuel demand remains anaemic. We're going to see this pattern of volatility in prices, with swings determined by inventory levels."

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