Heating oil prices track crude upwards

16 July 2010

Written by Kim Bardsley

Heating oil futures contracts were climbing on the New York Mercantile Exchange this morning, with macroeconomic conditions in Europe helping to lift the commodities out of early losses.

The slump during the Asian trading session came as concerns about a manufacturing slowdown spread across markets, but by 02:30 Central Standard Time the headline August-delivery contract was trading up more than a cent at $2.0336 a gallon.

Meanwhile, crude prices were making upward movements towards $77 a barrel as European equities rallied and the euro strengthened to a two-and-a-half-month high against the dollar.

A stronger euro tends to make dollar-priced assets such as crude and heating oil more attractive to European investors, although other factors such as poor demand conditions and falling stock prices can also weigh on demand among traders.

Looking ahead to next week, Jonathan Barratt, managing director at Commodity Broking Services in Sydney, told Reuters: "Given that the economic outlook is mixed, the key will be the weather as we head into the hurricane season."