Increase in heating oil prices

20/10/2009

Heating oil prices were at 205.59 cents, a 37 point increase, for November delivery this Tuesday (October 20th).

Brent crude oil for December delivery was trading at $78.03 per barrel, an increase of 26 cents, reports Marketwatch.

Analysts may now be speculating if prices will continue to increase or if they could fall back to the more familiar levels that have been seen in recent months.

Stephen Schork, author of The Schork Report, said: "At this point there is no real point in stepping in front of the NYMEX/ICE freight train."

The latest US inventory data is due from the Department of Energy on Wednesday. Distillate stockpiles, including heating oil and diesel, are expected to drop one million barrels, partly due to colder-than-normal weather.

Ben Westmore, a commodities economist with National Australia Bank, suggested that caution still remains within the market as, if distillate stockpiles show an unexpected increase, then he would expect crude oil prices to fall back to the $75 area.

A number of investors have expressed concern that stockpiles are still high and that demand remains relatively low.