Heating oil down as experts warn of weak demand

12/06/2009

Heating oil prices were on their way to wiping out gains made yesterday (June 11th) during electronic trading in New York this morning.

By 06:02 Eastern Time, the New York Mercantile Exchange's July delivery heating oil contract was trading at $1.8305 (£1.11) a gallon, down 2.29 cents on yesterday's closing price.

The loss came as crude prices retreated on a three-day rally that took the commodity to an eight-month high of $73 a barrel.

Speaking to Reuters, the governor of the Bank of Canada Mark Carney said that traders may have been too optimistic about prospects for economic recovery.

"Economies are going to grow initially because of the scale of monetary and fiscal stimulus, not in spite of it... and self-sustained private demand is not yet there," he commented.

Hopes of recovery had been building on figures showing that output in China was on the mend, while the Energy Information Administration also published data showing that inventories of crude, gasoline and heating oil are falling in the US, suggesting that demand is picking up once more.