Heating oil slides again

20/01/2009

Heating oil prices have continued to fall during trading so far today (January 20th), extending losses witnessed yesterday.

On the New York Mercantile Exchange, the leading heating oil contract reached a low of $1.3710 (98.75p) during early trading, a drop of more than seven cents.

Meanwhile, crude contracts on the same bourse shed as much as ten per cent of their value as demand for the commodity remained weak.

Prices fell as the Ukraine and Russia reached an agreement to recommence gas supplies to western Europe after disruptions since the beginning of the year.

And while heating oil and crude plummeted as concerns about energy supplies were allayed, private investment bank Goldman Sachs has predicted that prices will not remain subdued for long.

The company has forecast a sharp rally in oil and derivatives such as heating oil in the latter half of 2009.

It predicts a return to crude prices of around $60 a mark later in the year.