Heating oil down after gains

12/02/2009

Heating oil prices have fallen fractionally during trading on the New York Mercantile Exchange this morning (February 12th), reducing gains made yesterday.

Although heating oil prices rose to $1.3288 (93.7p) yesterday, up 1.5 cents, the commodity had dipped 0.94 cents by 5:39 Eastern Time.

The losses mimic sustained declines seen in crude prices this week. The falls have largely been attributed to the publication of new forecasts for oil demand published by the Energy Information Administration.

In its monthly outlook, the group revised its estimates for crude demand in the US downwards, taking into account the increasingly weak economic situation.

Despite the subdued prices, Total's chief executive Christophe de Margerie has warned that oil firms need to invest heavily in new projects and existing production to avoid a sharp surge in oil prices in the coming months.

Speaking to Reuters, he said: "A worst case scenario would be that crude prices rebound too fast before the crisis ends."