Heating oil up on supply concerns

26/06/2009

Wholesale heating oil contracts trading on the New York Mercantile Exchange were up during electronic trading this morning (June 25th), extending gains seen yesterday.

The July delivery heating oil contract was trading at $1.7933 (£1.08) a gallon at 05:22 Eastern time, up 1.7 cents on its closing price yesterday.

The second day of rises came as concerns mounted about the stability of supply in Nigeria as rebel activity in the Niger Delta region persisted.

Crude prices also rose sharply after the Movement for the Emancipation of the Niger Delta, the region's main rebel group, claimed that it had destroyed a pipeline owned by Shell as part of its campaign to remove foreign oil companies from the country.

David Moore, a commodity strategist with Commonwealth Bank of Australia, said the rebel activity was the main cause of the end-of-week rally.

"It seems to have intensified and it's something that's helping keep prices at a higher level," he said.