Heating oil prices down on weak demand outlook

18 January 2010

Written by Bob Bardsley

Wholesale heating oil prices moved lower on the New York Mercantile Exchange this morning (January 18th), mimicking losses witnessed in the price of crude on the same exchange.

Both commodities rose considerably towards the end of 2009 as the US and Europe witnessed an unusually cold weather front that drove up demand for heating fuels.

However, with the cold weather relenting, traders are now focusing on the wider demand picture, and in this regard recent statements from the Qatari energy minister Abdullah bin Hamad al-Attiyah may have helped to bring prices lower.

Bloomberg reports that the public official declared that the Organization of Petroleum Exporting Countries will not change its output quotas because the international market is already well stocked.

The group, which is composed of some of the world's largest energy producers, cut production quotas dramatically at the tail-end of 2008 as demand for all crude products nosedived in the wake of the financial crisis.

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