Heating oil up in early trade

23/03/2009

In electronic trading on the New York Mercantile Exchange, heating oil prices have risen marginally on the back of crude gains.

By 7:08 Eastern Time, the April delivery heating oil contract was trading at $1.3834 (94.55p) a gallon, up 0.4 cents on its opening price.

The gains mimick a rise in the cost of crude futures, which have been buoyed by the announcement that president Obama will look to plough $700 billion into the US financial system to restore faith in the country's economy.

However, Carsten Fritsch, a commodity analyst at Commerzbank, said that the weak dollar is also encouraging international investors to move into commodities such as crude and heating oil.

"People are starting to use commodities again as a hedge. There is a hope that demand may pick up," he said, adding that the uptick in commodities could be seen "across the board".