Heating oil slips in morning trade

4 March 2010

Heating oil prices were lower in early trading this morning after strong gains yesterday.

Heating oil prices moved lower on the New York Mercantile Exchange this morning (March 3rd), ceding ground after rising sharply alongside crude yesterday.

Crude futures pushed a new seven-month high above $80 (€58) a barrel, while heating oil traded around the $2.07-a-gallon mark.

However, both commodities suffered this morning as the dollar rallied on international money markets, making the dollar-priced assets during trade driven by foreign investors in Asia.

Speaking to Bloomberg, Clarence Chu, a trader at options dealer Hudson Capital Energy in Singapore, said oil futures could be put under pressure unless a strong solution to the Greek debt crisis is secured, as a failure in this regard could cause the dollar to skyrocket against the euro.

Meanwhile, a report from the Energy Information Administration also undermined support for commodities as unexpectedly large builds in crude inventories were witnessed last week, while heating oil stocks also showed signs of demand weakness.

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