Heating Oil Price Trend for July 5: -2¢
Standard & Poor's Monday warning that a rollover of Greece's debt would be interpreted as a default caused concern and a slow day at the oil markets. (image: satelliteradioplayground.com and Nicholas Whitaker for HeatingOil.com)
Oil prices slipped late on Monday when concerns arose that a rollover of Greece’s debt will be considered a default, which could cause global oil demand to nosedive. Confidence in the global economy is already weak, and this latest report of Greece’s financial struggle from U.S.-based rating agency Standard & Poor’s demonstrated that this issue will likely continue to spook traders until its resolution is secured.
Heating oil dropped two cent while crude for August delivery slipped 20 cents to settle at $94.74 a barrel on the NYMEX.
The International Energy Agency’s decision to tap 60 million barrels of emergency reserves also continued to affect prices, even more than releasing the oil itself. OPEC members criticized the decision as a political move and an inappropriate manipulation of natural market activity. However, a recent Dow Jones survey showed most members were sensitive to the IEA’s argument as well, and anticipated that the weekly Department of Energy inventory report due out on Thursday will show inconsistencies in supply and demand that typically occur around holidays.
Despite OPEC’s failure to come to a decision to raise output following February’s ongoing deficit in production from Libya, the group has increased production. OPEC produced 29.76 million barrels of oil a day in May, and upped that by 657,000 barrels a day in June. Analysts commented they wouldn’t be surprised to see oil level out at around $100 a barrel in the near future.
Today’s average heating oil price in the Northeast is two cents lower than Monday’s average price.
