Heating oil higher in bullish market

26 July 2010

Written by Bob Burton

Heating oil prices were rising moderately on the New York Mercantile Exchange this morning (July 26th), driven higher by a bullish mood which pervaded commodities, equities and currency markets.

The August-delivery heating oil contract had gained as much as a cent on its opening price of $2.050 a gallon by the time European markets opened, while crude had also breached the $79-a-barrel barrier.

Ken Hasegawa, a commodity-derivatives sales manager at broker Newedge Group in Tokyo, told Bloomberg traders are ready to test $80 a barrel, responding to stronger equity markets.

"After the result of the [European banking] stress tests, we have to continue to monitor the financial markets. Even on Friday, the markets sustained gains," he said.

The tests have generally been received positively, with most EU countries finding their financial institutions capable of withstanding the pressure of the tests.

Seven of the 91 banks under scrutiny failed the tests; five were based in Spain, one in Greece and one in Germany.