Heating oil pares gains, tracks crude down

21/05/2009

Wholesale heating oil contracts selling on the New York Mercantile Exchange have fallen substantially today (May 21st), extinguishing strong gains made yesterday.

At the close of trading on Wednesday, the June delivery heating oil contract settled at $1.5411 (98.45p) a gallon, up 5.45 cents.

However, by 08:18 Eastern Time, the commodity had fallen 3.1 cents, tracking losses seen in crude futures, which were weighed down by a report from the Fed indicating that there are some substantial obstacles on the road to economic recovery in the US.

Speaking to Bloomberg, Tony Nunan, risk manager at Mitsubishi Corp in Tokyo, said that demand for crude and distillates such as heating oil and DERV remains stiflingly weak.

"I just don't think the fundamentals of the oil market can support [oil] prices up around the early $60s," he said.