Heating oil approaches $2.10 a gallon

9 September 2010

Written by Bob Burton

Wholesale heating oil prices were rising on the New York Mercantile Exchange (Nymex) this morning (September 9th), supported by strong demand data published yesterday.

Both crude and heating oil prices spiked in late trading on Wednesday after the American Petroleum Institute (API) recorded a sharp decline in crude inventories last week.

The weekly report, which was published a day later than usual due to Monday's Labour Day holiday, showed a 7.3 million-barrel decline in crude stocks, suggesting a strong uptick in demand.

Speaking to Reuters, Stefan Graber, a commodities analyst with Credit Suisse in Singapore, commented: "There are tentative signs of improving demand from what we saw last week. That could suggest demand conditions are firming indeed."

This sentiment was evident in electronic trading on the Nymex this morning, where the headline heating oil contract gained as much as a cent to trade above $2.09 a gallon, approaching the symbolic $2.10 barrier.

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