Heating oil falls heavily

17/02/2009

Heating oil prices have fallen significantly during trading on the New York Mercantile Exchange this morning (February 17th) despite warnings that the world could be heading for a supply crunch.

By 5:28 Eastern Time, heating oil for March delivery had fallen to $1.265 (88.83p), down more than 3.5 cents.

The slump came despite a statement from the International Energy Agency in which it was warned that the world could see a surge in crude prices in 2010 and beyond.

Meanwhile, light, sweet crude for March delivery also fell and was heading towards $36 a barrel by mid-morning.

Crude and heating oil prices have been dampened by the publication of data that demand in many European and Asian countries is likely to tail off further.

Speaking to Bloomberg, John Hall, director of John Hall Associates, commented: "The UK, US, Asia and the euro zone are all contracting at a faster rate than oil is being produced and the world is in a strong place in terms of oil stocks."