Heating Oil Price Preview: February 1, 2010
(image: thaienergy.org)
Last week marked the second week in a row of a net decrease in heating oil prices on the NYMEX, thanks in large part to weak demand for heating oil. Lately, demand for crude oil has also been low as a result of reduced activity in the refining sector—the portion of the oil industry that turns crude oil into heating oil and other useful fuel products.
In a trend that can be traced back to the second half of 2009, rising crude oil prices and consistently below-average demand for end products like gasoline and heating oil are taking a big bite out of refiners’ profits. In response, refineries have cut back their activity substantially, with some refineries shutting down for good.
Less refining activity means decreased demand for crude oil and lower crude prices. And wherever the price of crude goes, the price of heating oil tends to follow. The trend is showing no signs of abating, so we can expect steady-to-slightly-lower heating oil prices over the course of this week.
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Exxon, Chevron Report Falling Profits As Refining Sector Continues To Suffer | HeatingOil.com says: says:
[...] term, however, as we discuss in this week’s Heating Oil Price Preview, weak refined product demand should continue to moderate gasoline and heating prices. It also helps [...]