Heating oil wobbles after Opec decision

18/12/2008

Wholesale heating oil prices have fluctuated in trading today (December 18th), reversing falls witnessed after the Organisation of the Petroleum Exporting Countries' (Opec) cut.

At the close of trading on the New York Mercantile Exchange yesterday, heating oil for January delivery stood at $1.454 (94.3p) a barrel, down 1.7 cents on the previous day.

However, during early trading on the bourse this morning, heating oil had regained 1.4 cents by 9:07 GMT.

The fluctuating price comes after the announcement that Opec will limit crude output by a record 2.2 million barrels a day in a bid to balance supply and demand and support prices, which could also push heating oil and other distillate prices up.

However, the action was not sufficient to support crude prices, which fell below $40 in New York yesterday.

In total, Opec has now agreed to limit supply by 4.2 million barrels since September in a bid to address the tumbling demand brought on by the financial crisis and impending global recession.