Heating Oil Prices Rose by 16 Percent in 2010
Now that the frenzy of the end-of-2010 oil rally is sputtering out, it’s a good time to look back on all of last year and take stock of how heating oil prices changed over the last 12 months. On Friday, Bloomberg News reported that heating oil and gasoline prices both moved higher over the course of 2010, as they did in 2009 as well.
The price of heating oil at the New York Mercantile exchange began 2010 at $2.19 a gallon and ended the year on Friday at $2.54 a gallon. That’s an increase of 35 cents per gallon, or 16 percent, from January 4 to December 31.
Looking back on what drove heating oil prices in 2010, one word provides a pretty complete answer: macroeconomics. Economic trends in the global and US economies continually brought about peaks and valleys in the price of heating oil. Stimulus measures, national debt crises, monetary policies and currency values held considerable influence over heating oil prices last year, as one analyst told Bloomberg:
Heating oil and the energy complex are basically being led by the global economic picture, said Gene McGillian, an analyst and broker at Tradition Energy in Stamford, Connecticut. “The perceptions of the global economy and European and U.S. recovery are going to continue to be the primary drivers next year.”
Indeed, if 2010 proved anything about heating oil prices, it was that they are determined less by simple supply and demand than a host of global economic factors. And as Gene McGillian pointed out, there is every reason to believe that that dynamic will carry over into this year, topping the list of the five top heating oil news stories to watch in 2011.