Heating oil hanging on to gains

3 March 2010

Written by Kim Bardsley

Heating oil futures trading on the New York Mercantile Exchange were up a fraction of a cent on the gallon this morning (March 3rd), stable after gains made yesterday.

Tracking movements in crude futures, heating oil contracts were trading around $2.058 (€1.51) a gallon on the exchange this morning after a report yesterday showed a sharp rise in demand for heating fuels.

According to the American Petroleum Institute, distillate stocks - which include heating oil - fell by 4.1 million barrels across the US last week, indicating an improvement in demand.

Meanwhile, a weaker dollar also encouraged trading in US-listed commodities as foreign investors looked to capitalise on more favourable exchange rates.

Speaking to Reuters, Serene Lim, a Singapore-based oil analyst at ANZ, said further rises in heating oil and crude may be difficult to sustain. Crude futures breached the $80-a-barrel mark briefly during trading yesterday.

"The conditions are still rather difficult for prices to stay above $80 because we are not looking at very firm US economic data yet," she said.

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