Heating oil creeps higher

27/07/2009

Wholesale heating oil prices on the New York Mercantile Exchange (Nymex) were rising this morning (July 27th), creeping closer to $1.80 (£1.09) a barrel.

By 05:53 Eastern Time, the August delivery heating oil contract was trading at $1.7959, up 1.46 on Friday's closing price.

Gains were also seen in crude futures at the start of trading this week, with petroleum commodities supported by a renewed optimism in the prospects for economic recovery.

"Investors see the equity markets as a good lead for what you can expect oil demand to be going forward," said Ben Westmore, an energy and minerals economist at National Australia Bank in Melbourne, speaking to Bloomberg.

Key inventories data published last week showed persistent weakness in demand for crude and heating oil stocks.

Mr Westmore added that the prospect of inflation also typically encourages traders to move into real assets such as heating oil, crude and gasoline, in addition to other commodities.