Heating oil down as winter fuel season begins

6 September 2010

Written by Neil Brunskill

Heating oil prices were moving lower in electronic trading on the New York Mercantile Exchange this morning (September 6th) as the Labour Day holiday marked the end of the summer driving season.

Gasoline inventories have remained atypically high throughout the summer season as weakness in the manufacturing sector and other industries resulted in lower transit volumes.

And as the winter fuel season begins, both crude and heating oil moved lower this morning on expectations that fuel inventories will rise still further.

Speaking to Reuters, Peter McGuire, managing director at CWA Global Markets in Sydney, said the market is "awash with oil".

"There isn't much to drive the market higher. Traditionally, this time of year we are going into a quiet period when demand comes down," he said.

By 02:57 Central Standard Time, heating oil had lost more than half a cent to trade lower for a second day at $2.051 a gallon, while near-term crude contracts were trading down 28 cents at $74.32 a barrel.

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