Heating oil responds to swine flu fears

28/04/2009

The May heating oil contract on the New York Mercantile Exchange (Nymex) has fallen for the second consecutive day, with commodities and stocks weighed upon by the spread of swine flu beyond the borders of Mexico.

The World Health Organisation has taken its pandemic threat level to phase four, an unprecedented move and one that caused falls in commodities and stocks around the globe.

Michael Fitzpatrick, a vice-president for energy at MF Global in New York, said that traders had overreacted to the spread of the flu and warned that it could slow economic recovery significantly.

"It would be bad for the economy if the swine flu were to impact the travel and tourism sectors," he said, speaking to Bloomberg.

By the close of trading on the Nymex yesterday, front-month heating oil contracts had fallen to $1.3229 a gallon, down 4.54 cents on its opening price.

By 05:27 Eastern Time this morning, it had fallen a further 2.61 cents to trade at $1.2968 a gallon.