Heating oil shoots up on inventories data

26/02/2009

Heating oil made substantial gains on the New York Mercantile Exchange (Nymex) yesterday (February 25th) and has extended its rally this morning.

After climbing slowly in morning trade, heating oil for March delivery made a sharp gain following the publication of data from the Energy Department which showed that US crude inventories increased by a smaller margin than had been predicted.

Platts polled experts and found that inventories were likely to have risen by 2.25 million barrels over the course of last week.

However, the Energy Department data showed that stockpiles had increased by 750,000 barrels, indicating that demand for crude, in addition to heating oil, DERV and other derivatives, had been stronger than anticipated.

After the publication of the data at 10:30 Eastern Time, heating oil contracts rose sharply until lunchtime, when they levelled out, finishing the day at $1.2366 (86.68p) a gallon.

Crude futures also finished the day up more than $2.50 on the barrel as a result of the announcement.