Heating oil rises on weather, Iran fears

8 February 2010

Written by Kim Bardsley

Heating oil prices were up during the electronic trading session of the New York Mercantile Exchange at the beginning of the week, with colder weather and concerns about Iran's nuclear ambitions giving support to prices.

As European markets opened, the near-term heating oil contracts were trading at around $1.89 (€1.37) a gallon, still a long way off their 2010 highs above $2 a gallon.

Support came as a blizzard hit the Atlantic seaboard, leaving many thousands of homes in eastern states without power this morning. Meteorologists have warned that the region may see record snowfall as the blizzard moves westward.

"The cold weather in the United States is offering some support, although people may be less hopeful about a weather-related fuel demand spike after having seen bearish US crude inventory reports the past few weeks," said Ben Westmore, a commodities analyst at the National Australia Bank, speaking to Reuters.

Heating oil prices gained alongside crude at the start of the year as cold weather set in across much of North America and Europe, although the sub-zero temperatures had little impact on overall demand for heating fuels.

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