Heating oil tracks crude upwards

5 March 2010

Written by Neil Brunskill

Heating oil and crude looked set for a weekly price gain this morning (March 5th), with both commodities set for a weekly gain despite a dip yesterday.

Although weak house sales figures weighed on prices yesterday, the announcement that the Organization of Petroleum Exporting Countries (Opec) will be cutting output this month provided support for both crude and heating oil.

Opec is responsible for setting output quotas among all its members, which include Libya, UAE, Nigeria, Qatar, Iran and Saudi Arabia, the largest producer in the world.

Cutting output will give support to higher prices as the gap between supply and demand will decrease. In recent weeks, US inventories reports have shown that despite the gathering pace of recovery, demand for crude, heating oil and other fuels remains anaemic.

Looking ahead to trading later today, Jonathan Barrett, managing director at Commodity Broking Services in Sydney, told Bloomberg that stronger-than-anticipated jobs figures will provide further support for oil prices.

"Our expectations and prospects are for consumption of crude [to] pick up," he commented.

Click here for a home heating oil quote