Heating oil down on Greece concern, still set for weekly gain

19 March 2010

Written by Neil Brunskill

Heating oil prices were down this morning after the dollar climbed sharply against the euro yesterday on the back of renewed concerns about Greece's debt position.

There is growing speculation that the European Union will not deliver on a bailout package for the country if Greece fails to meet the requirements of a deadline set by the union which falls next week.

In trading yesterday, currency dealers flocked to the dollar in search of a safe haven, which in turn put pressure on crude and heating oil as the dollar-priced commodities became less attractive to foreign buyers.

As European markets opened, heating oil was approaching $2.10 (€1.54) a gallon on the New York Mercantile Exchange, down more than a cent, while crude prices had slipped below $82 a barrel.

"The dollar is firmer, and that's a factor affecting the oil price, but we've seen this pattern before - when oil gets above $82 or $83, buyers turn cautious and prices fall back," said David Moore, commodity strategist at the Commonwealth Bank of Australia in Sydney, speaking to Reuters.

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