Heating oil up ahead of Opec meet

16/12/2008

Wholesale heating oil prices have risen this morning (December 16th) ahead of the monthly meeting of the Organisation of the Petroleum Exporting Countries (Opec).

As ministers arrived in Oran, Algeria investors pushed heating oil up as concerns grow that a large supply cut is likely.

Venezuelan Oil Minister Rafael Ramirez told Bloomberg that a reduction of one million barrels a day would be necessary to bolster sliding oil prices.

On the New York Mercantile Exchange, heating oil for January delivery rose as high as $1.4975 (98.4p) a gallon after closing yesterday at $1.4724 a gallon.

In recent comments, Opec secretary general Abdalla Salem El-Badri told attendees at the 13th Annual IIES Oil and Gas Conference that the recent financial turmoil could be attributed to a lack of regulation in the US subprime mortgage market.

He added that at the same time, investors in crude markets who had been treating crude as an asset had substantially inflated oil prices, which in turn led to concomitant rises in heating oil, DERV and bunker fuel.