Heating oil up after Opec cut

17/12/2008

Heating oil has risen marginally in trading today (December 17th), following the announcement that the Organisation of the Petroleum Exporting Countries (Opec) will cut supply by two million barrels a day.

On the New York Mercantile Exchange, wholesale heating oil for January delivery rose to a high of $1.5344 (98.994p) a gallon, up nearly four cents on its opening price.


The heating oil price gains follow the announcement from Opec confirming that it will enact its biggest ever supply cut from January 1st 2009 in a bid to support the crude prices.

Following their monthly meeting, the cartel announced a cut of 2.2 million barrels a day.

However, Gary Ross, CEO of consultancy PIRA Energy, told Reuters that its effect will be tempered by macroeconomic conditions.

"It will be hard for the cuts to have any traction with regard to price in a deteriorating economic environment," he said.