Heating oil falls alongside crude as bearish sentiment returns

4 August 2010

Written by John King

Heating oil futures trading on the New York Mercantile Exchange were under pressure this morning (August 4th) as investors caught their breath after a five-day rally.

Both crude and heating oil futures were down in early trading as a bearish sentiment returned, with investors scrutinising the latest fuel demand data to come out of the US while also airing concerns about its pace of recovery.

As European markets opened, the front-month heating oil contract was trading around $2.1930 a gallon, down 0.7 cents on yesterday's settle price, while crude was under pressure but holding above $82 a barrel.

Serene Lim, a commodity strategist at Australia & New Zealand Banking Group in Singapore, said the latest demand data from the American Petroleum Institute had come as a shock to many traders.

"Gasoline inventories are going up and it's the middle of the driving season in the US. That is slightly surprising," he said.

Click here for your home heating oil quote