Heating oil follows crude higher

6 July 2010

Written by John King

Heating oil prices were rising as the European trading session got started this morning, with the commodity reversing earlier losses.

Both heating oil and crude were under pressure earlier in the morning on the New York Mercantile Exchange, with last week's nosedive in Asian equities and a stronger dollar dampening demand for commodity.

However, both commodities began to climb as the dollar lost ground against the yen, with some parties attributing the rise of the Japanese currency to China's purchase of Y200 billion worth of Japanese government bonds.

Speaking to MarketWatch, Satoshi Tate, a senior foreign exchange dealer at Mizuho Corporate Bank, said that while the bond sale provided a temporary boost, the volume of the purchase is unlikely to have any lasting impact.

As such, there may be a return to a stronger dollar as the day draws on, which would put pressure on both heating oil and crude, which were trading at $1.92 a gallon and $72.53 a barrel respectively as 02:57 Central Standard Time.