Heating oil performs volte-face on gains

25/03/2009

Heating oil prices have followed associated commodities and metals down in trading in New York this morning (March 25th), paring gains made on the Mercantile Exchange yesterday.

Gains were made across near, mid and far-term heating oil contracts yesterday, spurred in part by the publication of the results from a Bloomberg poll which showed an anticipated drop in US crude and distillates stockpiles fell last week.

A panel of experts gave a median estimate of a 100,000-barrel drop in heating oil and other distillate stocks, while crude inventories are expected to have fallen 650,000 barrels.

The true results will be published by the Energy Department's Energy Information Administration later today.

A drop in inventories may encourage a rally in Nymex commodities and help to put heating oil contracts back on the ascendant.

The gains made yesterday have been reversed in early trading this morning, with the April heating oil contract slumping to $1.4682 (£1.0019) a gallon by 6:28 Eastern Time.