'Cold winter needed' to shift heating oil stockpiles

24/09/2009

Stockpiles of distillates, a fuel category including heating oil and diesel, are at their highest levels since 1983.

The situation has meant that some refiners have been forced to search for extra storage, reports the Wall Street Journal.

Distillate stockpiles have increased by three million barrels, almost twice the expected level and gasoline stocks were also at a higher-than-expected level, rising by 5.4 million barrels in comparison to the predicted 400,000, data from the US showed this week.

Tom Bentz, a broker and analyst at BNP Paribas in New York, said that a cold winter may be necessary in order to boost the market and get rid of the inventory of domestic heating oil.

Analysts predict that a combination of high stocks and low demand will keep the pressure on oil prices.

BNP Paribas is a European leader in global banking and financial services. Its website states that it employs 205,000 people in 84 countries, including 10,300 in Asia, 15,600 in North America and 162,500 in Europe.