Heating oil down on demand, stronger dollar

2 March 2010

Written by John King

Heating oil futures on the New York Mercantile Exchange moved lower during late trading yesterday (March 1st) as the dollar strengthened against major competitors including the pound and the euro.

In the UK, sterling suffered the worst losses against the dollar seen in more than a year as the prospect of a hung parliament sparked a crisis of confidence among investors.

A stronger greenback tends to weigh on the price of dollar-linked commodities such as crude and heating oil as they become less attractive to foreign investors.

Meanwhile, in the US traders were once more sceptical about demand conditions in the country, the world's largest energy user.

Ahead of the latest demand report from the Energy Information Administration, a Bloomberg poll revealed expectations of further builds in crude, heating oil, gasoline and propane stocks.

The announcement sent both crude and heating oil lower yesterday and contributed to stagnation in this morning's trade.

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