Heating oil falls despite crude gains

25/11/2008

The wholesale price of heating oil has fallen during trading this morning (November 25th) despite a surge in the price of crude seen yesterday.

On the New York Mercantile Exchange, the heating oil contract for delivery in January stood at $1.796 (£1.19) a gallon, down 4.4 cents on its opening price.

This fall came despite significant gains in the exchange's main oil contract, with light, sweet crude gaining more than nine per cent during the day.

The price surge has been largely attributed to invigorated confidence following the confirmation of a bailout for the troubled Citigroup.

Meanwhile, Reuters noted that there is also growing evidence that the Organisation of the Petroleum Exporting Countries will limit supply again at this month's meeting in Cairo.

President of the cartel Chakib Khelil said that a cut of one million barrels a day would be necessary to stop prices from collapsing.

Such a restriction may in turn have an impact on heating oil prices.