Heating Oil Price Trend for June 30: +10¢

Posted by Quinn Wonderling on June 30, 2011 at 10:10 am

OPEC secretary general Abdullah El-Badri will meet with IEA reps to mend the rift over tapped emergency reserves and discuss ways to improve coordination in the future. (image: daylife.com and Nicholas Whitaker for HeatingOil.com)

Last week’s controversial decision to tap 60 million barrels of emergency oil reserves hasn’t had the impact the International Energy Agency desired, as heating oil prices surged ten cents and crude climbed $1.88 to finish at $94.77 a barrel on the NYMEX on Wednesday.

Reserves were released in an effort to bring prices down and stabilize the market. Analysts believe the results were short lived because it wasn’t done in March when Libyan production first began to bottom out, and because 60 million barrels simply isn’t that much. Global oil demand averages over 89 million barrels every day.

OPEC officials unanimously criticized the IEA’s decision, saying they never want this situation to be repeated. However, they also expressed a conciliatory attitude and a desire for the partnership to move forward. OPEC secretary general Abdullah Salem El-Badri is scheduled to meet with IEA executive director Nobuo Tanaka soon to discuss improving coordination between oil producers and consumers.

In other factors, Tropical Storm Arlene had some traders concerned about production disruptions in the Gulf, and many believe prices will continue to climb while the U.S. and other oil consuming countries replenish their reserves. Worries over Greece’s debt trouble have calmed for now, but new estimations show steady exports from Libya likely won’t return to normal levels for another few months. And lastly, the Tuesday report that oil inventories dropped far more than expected last week kept prices up again today.

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