Thursday, October 21, 2010

Heating Oil Price Trend for October 21: +6¢

Oil prices bounced back with some force at the NYMEX on Wednesday, recovering most of the ground lost on Tuesday. Wednesday’s rally began with a sinking US dollar, which always supports prices because it makes oil a cheaper investment for investors using foreign currency. But the big price increases followed the weekly report on US petroleum inventories released by the Energy Information Administration released late Wednesday morning. The report showed an increase in crude and gasoline stockpiles, but a 2.2-million-barrel decrease in distillate (a category that includes heating oil, road diesel, and jet fuel) inventories. Traders honed in on this bit of data, interpreting it as a sign of returning oil demand and a possible acceleration of economic recovery. The resulting gains in crude and heating oil prices at the NYMEX brought a significant increase in retail heating oil prices on Thursday. However, market prices were on the decline on Thursday morning in response to negative unemployment data.

Today’s average retail heating oil price in the Northeast is 6 cents higher per gallon than Wednesday’s average price.


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