Heating oil follows crude higher as Asian stocks rally

2 August 2010

Written by Kim Bardsley

Heating oil prices were rising on the New York Mercantile Exchange this morning (August 2nd) as traders grew confidence about the prospects for global economic recovery.

Asian stock indexes rose sharply this morning as traders relaxed their risk management strategies and this in turn led to an increased appetite for crude and other energy commodities.

There was a widespread perception that sustained growth in China would help to boost demand for oil in the coming weeks, while concerns about a slowdown in the US also partially abated.

Testu Emori, a commodity fund manager at Astmax in Tokyo, said equities will provide the driving force behind crude futures in upcoming sessions.

"As long as the US dollar is weaker, the US interest rate is lower, people may take the risk of investing money in commodities," he explained.

By the time European markets opened, crude was trading at a 12-week high above $79 a barrel, while heating oil futures were selling for $2.0981, up a cent on Friday's closing price.

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