Heating oil extends losses

16/02/2009

Despite a rally in crude prices on the New York Mercantile Exchange (Nymex), heating oil has fallen during after-hours trading this morning (February 17th).

By 5:46 Eastern Time, the bourse's main heating oil contract was trading at $1.2883 (90.39p) a gallon, down 1.17 cents on its opening price.

The slump extends losses seen on Friday, when heating oil dropped 2.18 cents to close at $1.3103 a gallon.

Despite this weak performance, crude futures have extended a rally that started on Friday, paring losses witnessed in the first half of the week, when demand data pushed the commodity downwards.

The cost of crude has received a boost from growing speculation that the Organisation of the Petroleum Exporting Countries (Opec) will look to constrict supply at a meeting due to be held in March.

"If the price is lower than $40 a barrel, then there will be a strong possibility of another cut," said Iran's Opec governor Mohammad Ali Khatibi, speaking to Bloomberg at the weekend.