Heating oil skids on economic concerns

22/06/2009

Wholesale heating oil contracts trading on the New York Mercantile Exchange were down again in electronic trading this morning (June 22nd) after suffering substantial losses on Friday.

By 05:26 Eastern Time, the July delivery heating oil contract was trading at $1.7688 a gallon (£1.07), down 1.7 cents on last week's closing price.

Heating oil futures closed down more than five cents on Friday, while crude prices also fell.

The upward momentum seen earlier in the month has weakened recently as investors and analysts become cautious of moving ahead of supply and demand fundamentals.

Speaking to the Associated Press, Victor Shum, an energy analyst with consultancy Purvin & Gertz in Singapore, said: "Oil may have peaked in the short-term. The market is overripe for a correction. Eventually the laws of supply and demand will re-exert themselves."

Crude oil prices were back below $70 a barrel this morning, moving further away from the year-high of $73 achieved earlier this month.