Heating oil back above $2, tracking crude

18 May 2010

Written by Bob Burton

Heating oil prices were in recovery on the New York Mercantile Exchange this morning (May 18th), climbing back above $2 (€1.61) a gallon.

Both heating oil and crude prices have slumped in recent sessions and today's upward activity looks set to break a cycle of losses that has last five days and has sent the commodities to their lowest prices in five months.

However, upcoming reports from the American Petroleum Institute and the Energy Information Administration could put pressure on the nascent price recovery if they reveal sustained weakness in demand for crude products.

"My thinking is that obviously the dominant factor is still concern about the international economic outlook, previous developments in Europe, and that's continuing to weigh heavily on the oil price," said David Moore, an analyst at the Commonwealth Bank of Australia, speaking to Reuters.

The European debt crisis has caused the dollar to appreciate dramatically against the euro, in turn making dollar-priced commodities less attractive to foreign investors.