Heating oil tumbles further

29/06/2009

Wholesale heating oil prices were down a fraction of a cent during electronic trading on the New York Mercantile Exchange this morning (June 29th), stabilising after losing more than 4.5 cents on Friday.

By 05:35 Eastern Time, the July delivery heating oil contract was trading at $1.7242 (£1.04), down 0.6 cents on the gallon.

Meanwhile, crude futures were also down fractionally during a period of subdued trading in petroleum commodities.

Investors have this morning taken stock of a new report from the International Energy Agency (IEA) which predicts that demand for crude and distillates such as heating oil will remain below its 2008 peak until 2012 at the earliest.

Prices surged in the summer of 2008, with unprecedented demand and concerns about supply stability taking heating oil above $4 a gallon, while benchmark crude contracts soared to $147 a barrel.

The IEA report claimed that the economic crisis has taken a "severe toll" on oil demand, with prices falling at a rate not seen since the 1980s.