Heating oil prices rally on weak dollar

17 February 2010

Written by Neil Brunskill

Heating oil futures on the New York Mercantile Exchange rallied strongly during trading yesterday (February 16th) and have this morning breached $2 (€1.50) a gallon.

The heating oil contract tracked gains in crude prices yesterday as the dollar suffered during global foreign exchange trading. The greenback plunged against the euro while also losing ground to high-yield currencies such as the Australian dollar.

Speaking to Reuters, Phil Flynn, an analyst at PFGBest Research in Chicago, said that traders were confident that the Greek debt crisis, which has put considerable pressure on the euro, is being contained effectively.

He added that this brought temporary support for crude prices, adding that "at the same time, we are seeing prices of other commodities such as gold, silver and copper rise sharply".

After rising more than $2, crude contracts are currently trading at around $77 a barrel, recovering from a persistent weakness in energy demand that has weighed on prices since the beginning of the year.

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