Heating Oil Price Trend for February 8: -5¢
(image: 2.bp.blogspot.com and Nicholas Whitaker via heatingoil.com)
Worries about the pace of US economic recovery caused crude and heating oil prices to decline on Friday. Even a drop in the unemployment rate did not convince investors that the economy was poised for growth that would generate increased industrial and transportation activity (both of which require lots of oil) that would bring down oil inventories that remain well above average. The dollar strengthened on Friday as well, further suppressing oil prices. Commodities prices in dollars, like crude oil and heating oil futures, tend to fall when the dollar is strong because it makes those commodities more expensive for investors holding other currencies.
Today’s average retail heating oil price in the Northeast is 5 cents lower than Friday’s average price.
Heating Oil Price Trend for February 5: -8¢
(image: paper-money.blogspot.com and zimbio.com)
Rising unemployment claims, falling stock markets, and a stronger dollar combined to produce Thursday’s dive in crude and heating oil prices. The surprisingly large increase in jobless claims undermined optimism regarding economic recovery, and pushed down prices in stock markets and commodities markets. Despite the poor economic news, the dollar rose against the euro, which is losing value as Greece and other southern European nations face budget crises. A strong dollar makes commodities priced in dollars, such as heating oil and crude oil, more expensive to investors who hold other currencies. That constricts demand and contributed to Thursday’s falling oil prices.
Today’s average retail heating oil price in the Northeast is 8 cents lower than Thursday’s average price.
Heating Oil Price Trend for February 4: -1¢
(image: Stephen Chernin via Getty Images and Nicholas Whitaker via heatingoil.com)
Rising inventories of crude oil dragged down crude and heating oil prices yesterday, reversing the oil rally of Monday and Tuesday. According to the EIA, stockpiles of crude grew by 2.3 million barrels, much more than was expected. Though inventories of distillates, which include heating oil and diesel, fell by 1 million barrels, many analysts had expected that the growing US manufacturing sector would cause a much steeper drop in distillates. The EIA’s inventory numbers showed that demand for oil remained weak, despite signs of recovery in the US economy, and oil prices fell as a consequence.
Today’s average retail heating oil price in the Northeast is 1 cent lower than Wednesday’s average price.
Heating Oil Price Trend for February 3: +8¢
(image: thaienergy.org and Nicholas Whitaker via heatingoil.com)
Oil prices surged yesterday as this week’s manufacturing report and stock market gains pointed to a recovery in the US economy that would revive fuel demand. Forecasts for cold weather in the Northeast raised expectations for greater demand for heating oil, and a weak dollar supported higher prices for commodities in general, since it makes commodities cheaper for those who hold other currencies. Investors expect this week’s inventory report from the EIA to show drawdowns in oil inventories, reflecting growing demand for oil. The EIA report, due out at 10:30 am, could give oil prices a strong push in either direction.
Today’s average retail heating oil price in the Northeast is 8 cents higher than Thursday’s average price.
Heating Oil Price Trend for February 2: +5¢
Yesterday's manufacturing data mitigated fears that simply increased inventories was the spur behind recent GDP growth. (image: etftrends.com and zimbio.com)
Positive manufacturing data in the US led to a spike in crude and heating oil prices on Monday. The Institute of Supply Management index, which measures factory activity, rose to its highest level since August 2004. Manufacturing growth persuaded investors to reconsider Friday’s GDP numbers, as well. Though US GDP increased by 5.7 percent in the fourth quarter, it had little effect on oil prices last week. However, the combination of GDP growth and manufacturing growth signals economic recovery to many observers. Attention will now turn to inventory reports to assess whether economic growth in the US has had any impact on oil demand.
Today’s average retail heating oil price in the Northeast is 5 cents higher than Monday’s average price.
Heating Oil Price Trend for February 1: -1¢
(image: BenjaminJoel via flickr.com and life.com)
Oil prices fell on Friday despite the Commerce Department’s report that GDP had grown by 5.7 percent in the fourth quarter. Many analysts believed that GDP growth had been inflated by businesses restocking inventories that had been allowed to fall during the recession, and discounted Commerce’s figures. Demand for oil remained weak, shown by collapsing profits in the refining sector—Chevron’s refineries and filling stations lost an average of $278,000 an hour in the fourth quarter. A stronger dollar added further pressure on the price of crude and heating oil, since a strong dollar reduces the appeal of commodities as hedges against inflation.
Today’s average retail heating oil price in the Northeast is 1 cent lower than Friday’s average price.
Heating Oil Price Trend for January 28: -3¢
(image: proactiveinvestors.co.uk and Nicholas Whitaker via heatingoil.com)
The EIA inventory report showed that demand for oil remained low, as stockpiles of refined oil products rose last week. Distillate inventories, a category of fuel that includes heating oil and diesel, rose by 400,000 barrels—an increase that went against expectations for a significant drawdown of distillates. Gasoline supplies rose as well, climbing by 2 million barrels. The builds in inventories of refined products signal especially weak demand, since refineries continue to operate well below capacity.
Today’s average retail heating oil price in the Northeast is 3 cents lower than Wednesday’s average price.
Heating Oil Price Trend for January 27: -2¢
(image: Getty Images, China Photos via abc.net and Nicholas Whitaker via heatingoil.com)
Concerns over China’s new policy to limit credit growth continued to affect the oil markets and pushed down the price of crude and heating oil on Tuesday. Oil demand remains weak despite colder weather in the eastern half of the US, and China’s more restrictive lending policy will cut into the growing demand for oil in the Chinese economy. A stronger dollar also weighed on oil prices, since it reduces the appeal of commodities as a hedge against inflation.
Today’s average retail heating oil price in the Northeast is 2 cents lower than Tuesday’s average price.
