Heating oil correcting losses

26/08/2009

Heating oil prices rose during electronic trading on the New York Mercantile Exchange (Nymex) this morning (August 26th), moving against a sharp dip witnessed yesterday.

At 05:12 Eastern Time, the September delivery heating oil contract traded at $1.8676 (£1.14) a gallon, up 1.17 cents on the closing price yesterday.

The contract plunged on the Nymex alongside crude futures yesterday, after a report from the American Petroleum Institute estimated that oil inventories in the US rose by 4.35 million barrels last week.

Analysts had hoped that inventories dropped last week, extending the recovery in demand witnessed in figures for previous week published by the Energy Information Administration (EIA).

Crude and heating oil prices surged in mid-week trading last week after the EIA data showed an unexpectedly sharp drop in inventory levels, suggesting that demand is picking up.

However, some analysts concluded that the dip was more likely to be attributable to a shortfall in oil imports during the week.