Heating oil down again

23/12/2008

Heating oil prices have fallen marginally during trading this morning (December 23rd), tracking falls in the price of crude.

On the New York Mercantile Exchange, heating oil for January delivery lost 0.45 cents on the gallon, standing at $1.3490 (91.2p) by 10:45 GMT, although the February delivery contract remained stable during morning trades.

Commenting on the recent plunge in oil prices and concomitant drop in heating oil costs, Mark Mathias, chief executive of commodity fund manager Quantum Asset Management, has told Reuters that there has been an exodus of investment out of oil and into cash in recent months.

However, he noted that oil prices are now so subdued that they present good growth opportunities for long-term investments such as pension funds.

"Everyone is worried about when to go back in. Long-term, oil is cheap, but who knows where it goes in the short term," he commented.

He added that investors are looking for signs that crude prices have hit the floor.