Heating oil stumbles on China's lending, demand concerns

26 January 2010

Written by John King

Heating oil prices dipped during the Asian trading session this morning, expunging yesterday's gains.

Wholesale heating oil prices were down on the New York Mercantile Exchange this morning (January 26th) as concerns about US fuel demand and lending conditions in China resurfaced.

In a bearish Asian trading session, crude oil prices also dipped as it emerged that Chinese authorities have taken further action to limit lending growth in the country, with the central bank declaring that many lenders will have to increase their reserve ratios immediately.

Meanwhile, in the US surveys conducted by Reuters and Bloomberg suggested that demand for crude, heating oil, gasoline and other derivatives remains precipitously weak.

The Bloomberg poll anticipated that refiners will tomorrow be shown to have cut production for a second week in a row, while analysts questioned by Reuters expected that output sunk to a 25-year low last week.

Both polls came ahead of the publication of the latest weekly inventories figures from the Energy Information Administration which are due out tomorrow.

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