Afternoon Price Check, September 2: Oil Prices Post More Gains on Economic Data and Hurricane Threat
Crude oil prices dipped this morning before bouncing back in afternoon trading at the NYMEX. (image: ft.com)
Fresh tidbits of positive economic news brought increases in crude and heating oil prices at the NYMEX for the second day in a row today. Official data released on Thursday showed a small decrease in new unemployment claims this week, an increase in pending home sales during July, and a rise in factory orders for commercial airplanes and other oil-dependent products. Those economic factors provided primary support to oil prices, while Hurricane Earl’s threat to East Coast refining activity and an oil rig explosion in the Gulf of Mexico added secondary support. The price of crude closed near $75 per barrel, the middle of the $70 to $80 range it has been contained by in recent weeks. US stock markets also posted gains today, helping to lift oil prices by building general economic optimism. The increase in the market price for heating oil will likely bring a modest increase in retail prices tomorrow. Despite Wednesday and Thursday’s short-term gains, medium- and long-term oil prices show few sings of staging a sustained climb under huge supplies and general economic uncertainty.
Today’s Closing Prices at the NYMEX
Crude oil (October 2010 contract): Up 1.5 percent, $75.02 a barrel
Heating oil (October 2010 contract): Up 1.5 percent
Afternoon Price Check, September 1: Oil Prices Bounce Back on Stock Market Gains
Crude oil price jumped at the NYMEX today on tidbits of positive economic news that also sent stock markets climbing. (iimage: ft.com)
After dropping sharply to end the month of August yesterday, crude and heating oil prices rose steeply at the NYMEX today, following surging stock markets. News that both US and Chinese manufacturing increased last month gave a major boost to perceptions of the American economy and future global oil demand. This morning’s petroleum inventory report from the Energy Information Administration showed a substantial increase in crude oil supplies and only modest decreases in gasoline and distillate (a category that includes heating oil) supplies last week, but it was brushed aside by traders in favor of new economic hopes spurred by manufacturing data. Record-high crude and oil product inventories and a shaky economy still loom over oil markets and remain important factors in considerations of short- to medium-term crude and heating oil prices. Big market gains brought a four-cent increase in retail heating oil prices around 11 am today, and those gains will likely hold on through tomorrow morning.
Today’s Closing Prices at the NYMEX
Crude oil (October 2010 contract): Up 2.7 percent, $73.91 a barrel
Heating oil (October 2010 contract): Up 2.6 percent
Afternoon Price Check, August 31: Oil Prices Continue Slide on High Supplies
A weak US economy and massive supplies of petroleum products sent the price of crude plummeting on Tuesday. (image: ft.com)
The huge supplies of crude oil, gasoline, and distillates (a fuel category that includes heating oil and diesel) weighed heavily on oil prices today, sealing considerable declines during the month of August. A bearish supply and demand picture in the US was aided in bringing prices down by the closure of the September contract on heating oil and other finished petroleum products. With near-term prospects of higher prices almost non-existent, front-month (nearest month) contracts for crude and heating oil are extremely unattractive investments. The declines will likely bring a major decrease in retail heating oil prices tomorrow. Most market watchers expect tomorrow’s petroleum inventory report from the Energy Information Administration to show another increase in already record-high stockpiles. If so, expect more declines in crude and heating oil prices for the rest of the week.
Today’s Closing Prices at the NYMEX
Crude oil (October 2010 contract): Down 3.7 percent, $71.92 a barrel
Heating oil (September 2010 contract): Down 2.6 percent
Afternoon Price Check, August 30: Oil Prices Drop on Stock Market Declines, Economy
The price of crude oil fell today as the outlook for the US economy remained bleak. (image: ft.com)
Crude and heating oil prices slipped at the NYMEX today, as the momentum from Fed Chairman Bernanke’s encouraging comments on the US economy wore off and stock markets sunk. With record-high supplies of petroleum products and relatively weak demand, oil prices of late have been increasingly led by stock market indexes and other economic indicators. Improvement in the economy is required for growth in oil demand and sustained price increases. New economic data to be released tomorrow will provide the latest positive or negative drivers of oil prices.
Today’s Closing Prices at the NYMEX
Crude oil (October 2010 contract): Down 0.6 percent, $74.70 a barrel
Heating oil (September 2010 contract): Down 0.9 percent
HeatingOil.com Helps Thousands of Heating Oil Users Find New Heating Oil Suppliers Every Month
A lot of our readers already know that HeatingOil.com is the authoritative voice on issues facing heating oil consumers. But many don’t know that it is also the number one destination for consumers looking for a new heating oil supplier.
With tens of thousands of consumers coming to our site every month to read our heating oil articles, more and more of our readers are trying out HeatingOil.com’s Dealer Locator. With over 200 HeatingOil.com Approved Dealers to choose from and thousands of buying inquiries a month, we’re revolutionizing the process of how consumers find a new heating oil company. HeatingOil.com’s Heating Oil Equipment service has also helped hundreds of heating oil users find the best equipment to fit their needs at the best prices available.
Choosing a new heating oil or equipment supplier is an important decision- it isn’t something you can do by just looking in the yellow pages. You need to know the dealer you select is going to be dependable, financially stable, and provide great service. With HeatingOil.com all our participating dealers have been vetted and approved to ensure they meet our standards. You’ll know that if you choose a dealer from HeatingOil.com, you’re working with one of the best in the industry.
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If you’re looking for a new heating oil company, give HeatingOil.com’s Dealer Finder a try here. And if you’re a high quality heating oil supplier looking for some new customers, you can apply for our free trial here.
Afternoon Price Check, August 27: Oil Prices Continue Climb on Stock Market Gains
Fed Chairman Bernanke's pledge to take decisive action on the economy boosted stock and crude oil prices on Friday. (image: ft.com)
Much-anticipated comments from Fed chairman Ben Benanke boosted confidence in the US economy and sent stocks rising, which brought oil prices higher for the third day in a row. Tropical storm Earl also lent some support to prices as it moved toward the Gulf coast, setting off concerns that it could disrupt US refining operations. Moderate gains by crude and heating oil prices at the NYMEX will likely bring moderately higher retail heating oil prices on Monday.
Today’s Closing Prices at the NYMEX
Crude oil (October 2010 contract): Up 2.5 percent, $75.17 a barrel
Heating oil (September 2010 contract): Up 0.6 percent
Price Check, August 26: Oil Prices Continue Upswing on Dip in Unemployment
The price of crude oil was on the rise for most of the trading day on positive news on US unemployment and a weak dollar. (image: ft.com)
Oil prices rose for the second day in a row on Thursday, supported by a not-so-bad weekly jobs report and continuing weakness in the US dollar. A US jobs report showed that new unemployment claims decreased last week, giving some reason for optimism that the economy could be on the road to recovery and oil demand could pick up in the coming weeks and months. The falling dollar also helped support oil prices by making the commodity cheaper to holders of foreign currency. As was the case on Wednesday, bullish news outweighed the most recent report on petroleum inventories that showed increases in all three categories of fuel. Today’s increases in the market prices of crude and heating oil will likely bring another significant increase in retail heating oil prices on Friday.
Today’s Closing Prices at the NYMEX
Crude oil (October 2010 contract): Up 1.2 percent, $73.36 a barrel
Heating oil (September 2010 contract): Up 2 percent
Afternoon Price Check, August 25: Oil Prices Up Despite Inventory Builds
A bearish inventory report kept the price of crude oil down on Wednesday morning, but a surging stock market and weak dollar led it higher by the afternoon. (image: ft.com)
Oil prices turned around on Wednesday afternoon after five losing days on the power of a weakening dollar. The increases in crude, heating oil, and gasoline prices came as something of a surprise, as the EIA’s petroleum inventory report showed an increase in all three categories last week. Increases in crude, gasoline and distillates (which include heating oil) usually send prices downward, as they are a sign of a decrease in demand and consumption. But a weaker US dollar and rising stock markets were enough for traders to look beyond the bearish signs of the inventory report and invest in oil. The unexpected reversal will likely bring a substantial increase in retail heating oil prices on tomorrow.
Today’s Closing Prices at the NYMEX
Crude oil (October 2010 contract): Up 1.7 percent, $72.52 a barrel
Heating oil (September 2010 contract): Up 1.8 percent
Afternoon Price Check, August 24: Oil Prices Slide for Fifth Day in a Row
More news reinforcing the fragile economic recovery in the US brought a steep decline in crude oil prices at the NYMEX on Tuesday. (image: ft.com)
Fears of continuing economic stagnation and low demand further tightened their grip on oil markets today, leading crude and heating oil prices to close lower for the fifth consecutive day. An announcement from the president of the Chicago Federal Reserve that stated the risk of a double-dip recession is higher now than it was six months ago was the latest data to support concerns over the US economy sluggish pace of recovery. The end of an extremely calm driving season contributed to further declines in gasoline prices, which also put a drag on crude and heating oil prices. Another modest decrease in retail heating oil prices will likely come on Wednesday as a result of Tuesday’s market losses.
Today’s Closing Prices at the NYMEX
Crude oil (October 2010 contract): Down 2 percent, $71.45 a barrel
Heating oil (September 2010 contract): Down 1 percent
Afternoon Price Check, August 23: Gasoline Leads Oil Prices Down Again
Crude oil prices rose to begin the trading day, but later fell under the weight of plummetting gasoline prices and a stronger US dollar. (image: ft.com)
After showing modest upward movement this morning, crude and heating oil prices dropped and ended the trading day below their opening positions for the fourth day in a row. Crude oil ended the day at its lowest closing price since July 6. In an unusual turn of events, the price of gasoline dropped sharply and was a significant factor in falling crude and heating oil prices. The US dollar, which was losing value at the open of the trading day, reversed course and strengthened, putting added downward pressure on oil prices. Falling stock indexes provided further proof of US economic weakness and experts confirmed that tropical storm Danielle would not affect refining operations on the Gulf Coast, both of which contributed to lower oil prices. Lower prices on NYMEX will likely bring a small decrease in retail heating oil prices on Tuesday.
Today’s Closing Prices on the NYMEX
Crude oil (October 2010 contract): Down 1.2 percent, $71.98 a barrel
Heating oil (September 2010 contract): Down 0.7percent
Afternoon Price Check, August 20: Oil Prices Continue Slide on Weak Economy, Stronger Dollar
A raft of negative economic data accumulated over the course of the week brought another down day for crude oil prices on Friday. (image: ft.com)
More negative news on the US economy emerged on Friday, driving down oil prices for the fourth day this week. Thursday’s government report that showed a major increase in US unemployment claims last week continued to loom over oil markets and undermine hopes of any soon-to-come increases in oil demand. According to CNBC, an announcement on Friday from the Economic Cycle Research Institute stated that a measure of future economic growth fell to a three-week low, which contributed to pessimism on the US economy and falling oil prices. Stocks also moved lower on US markets, putting further downward pressure on crude and heating oil prices at the NYMEX. Today’s declines will likely bring another moderate decrease in retail heating oil prices on Monday.
Today’s Closing Prices on the NYMEX
Crude oil (September 2010 contract): Down 1.3 percent, $73.46 a barrel
Heating oil (September 2010 contract): Down 1.3 percent
Afternoon Price Check, August 19: Oil Prices Drop Again on Economic Data
Crude oil was on an upward track for most of the day, but bottomed out after the release of negative economic data in the afternoon. (image: ft.com)
After moving upward on promising news from Germany oil prices slipped on new economic data that were not good signs for economic recovery in the US. The US Department of Labor reported 500,000 new state unemployment claims were filed last week, which underscored the nation’s serious joblessness problem and intensified fears of a double-dip recession. Manufacturing activity in the Mid-Atlantic region slowed for the first time in over a year last month, according to the Philadelphia Federal Reserve—another sign of the country’s economic weakness and uncertain future. Both crude and heating oil closed more than one percent below their opening prices on the NYMEX, which will likely bring a moderate decrease in retail heating oil prices tomorrow.
Today’s Closing Prices on the NYMEX
Crude oil (September 2010 contract): Down 1.3 percent, $74.43 a barrel
Heating oil (September 2010 contract): Down 1.1 percent
EIA Gives Overview of Northeastern States’ Plans for Low-Sulfur Heating Oil
Ultra-low sulfur diesel will be the required heating oil by 2012 in several Northeastern states. (image: dep.state.pa.us)
The Energy Information Administration’s This Week in Petroleum newsletter, released on Wednesday, provides a nice summary of the transition to cleaner heating oil in Northeastern states.
In addition to the current status of low-sulfur and biodiesel content mandates in the 12 states that make up the Northeast, plus New York City and Washington, D.C. (table reproduced below), the newsletter provides heating oil consumption statistics and touches on challenges the industry faces in transitioning to a cleaner fuel. According to a 2008 report, New York is the biggest heating oil consumer, accounting for 23 percent of the US total, followed by Massachusetts, Pennsylvania (both 13 percent) and Connecticut (11 percent). The report states that the US consumes 4,648,017 gallons of heating oil per year.
The newsletter acknowledges that the goals of the states are to reduce air pollution and cut down heating system maintenance and repair costs, but notes some supply obstacles and possible price increases that could result from pending mandates. Low-sulfur mandates may at first result in reduced fuel imports, the report states, because production of low-sulfur distillates is limited in other parts of the world. As a result, bouts of cold weather could bring price spikes, as imported heating oil is often used to meet sharp increases in demand. The report also notes that required changes to refinery infrastructure and the higher cost of storing and shipping low-sulfur fuel could result in higher wholesale and retail heating oil prices. However, it should be noted that theses conclusions are based on data published in May of 2001, and may not be completely accurate, as significant changes may have occurred in the refining and heating oil industries over the last decade. The National Oilheat Research Alliance (NORA), an organization funded by the heating oil industry, released its own report on the transition to low-sulfur heating oil in May of this year that contradicts some of the EIA’s conclusions. Most notably, the NORA report found that “For consumers, the higher cost of ULSD [ultra low-sulfur diesel] relative to heating oil will be more than offset by lower maintenance costs and higher fuel efficiency.”
Clearly, the move to low-sulfur heating oil has the potential to affect heating oil supply dynamics and heating oil prices. The question is, will possible short-term price increases be offset by lower maitenance and repair costs as NORA claims? If so, how long will it take for the average consumer to recoup increased costs? These questions will continue to be debated by various elements in the petroleum industry, and the answers will only become clear once the first low-sulfur requirements take effect. For a more in-depth look at the pros and cons of low-sulfur and biodiesel mandates for heating oil users, take a look at this HeatingOil.com post from March of this year that compares arguments for and against mandates in Connecticut.
(image: "Current Northeast State Regulatory Activities to Reduce Sulfur in Heating Oil" from eia.gov)
Afternoon Price Check, August 18: Oil Prices Close Slightly Lower on Mixed Inventory News
The price of crude recovered from some midday losses, but still closed lower on the NYMEX. (image: ft.com)
Petroleum inventory data from the EIA released this morning, though less bearish than yesterday’s report from the API, held down crude and heating oil prices on NYMEX for the course of the trading day. The EIA report showed modest decreases in crude and gasoline supplies (810,000 and 39,000 barrels, respectively), but an increase in distillate stockpiles (1.1 million barrels), which include heating oil. The declines in gasoline and crude stocks were not enough to allay concerns that economic recovery will continue to move at a snail’s pace in the US and keep a lid on demand for petroleum products. The build in distillate stocks will likely keep retail heating oil prices flat tomorrow.
Today’s Closing Prices on the NYMEX
Crude oil (September 2010 contract): Down 0.5 percent, $75.42 a barrel
Heating oil (September 2010 contract): Down 0.1 percent
Afternoon Price Check, August 17: Rising Oil Prices Bring Midday Heating Oil Price Change of +4¢
Gains on US stock markets translated to higher crude oil prices on Tuesday. (image: ft.com)
Surging stock markets and a weak US dollar were the leading causes of crude and heating oil both posting moderate gains over the course of Tuesday’s trade. Led by stronger-than-expected earnings reports from Wal-Mart and Home Depot, US stock indexes rose, supporting hopes that economic recovery will pick up soon. Increased economic activity means increased demand for petroleum products, so stock market gains stimulated interest in crude and heating oil futures contracts. As market prices rose today, heating oil wholesalers around the Northeast increased prices by 4 cents per gallon.
The American Petroleum Institute (API) will release weekly data on US inventories of petroleum products later today. Unless the data shows big decreases in heating oil or crude stockpiles, the four-cent-per-gallon increase in retail heating oil prices will likely remain unchanged tomorrow. The Energy Information Administration (EIA) will release its own inventory report tomorrow, which is widely regarded as more accurate than the API data. The EIA report will likely be the main determinant of oil prices tomorrow, especially considering last week’s extremely bearish data that helped extend oil’s losing streak.
Today’s Closing Prices on the NYMEX
Crude oil (September 2010 contract): Up 0.7 percent, $75.77 a barrel
Heating oil (September 2010 contract): Up 1.8 percent
Afternoon Price Check, August 16: New Economic Data Keep Oil Prices Sliding
The price of crude fell for a fifth consecutive day at the NYMEX. (image: ft.com)
Last week’s pessimism about the future of global oil demand carried over into today’s trading, which ended with both crude and heating oil prices slightly lower than their opening marks. A weaker dollar gave oil prices some support at the NYMEX today, but that support was outweighed by mixed economic news from Japan, now the world’s third-largest consumer of crude oil, and flat stock markets in the US. Flat or falling stock markets and lingering doubts about when demand for oil will begin to pick up in the US and the rest of the developed world will likely continue to weigh down prices. As stated by the Wall Street Journal, “some market watchers say oil prices could continue to drop with further worrisome economic data.”
Today’s Closing Prices on the NYMEX
Crude oil (September 2010 contract): Down 0.2 percent, $75.24 a barrel
Heating oil (September 2010 contract): Down 0.4 percent
Afternoon Price Check, August 13: Oil Prices Fall for Fourth Consecutive Day
The price of crude faked up, then went down on the NYMEX today. (image: ft.com)
Crude and heating oil prices staged a rally this morning, and for a while it looked like oil’s three-day losing streak might be over. The rally was motivated largely by US retail statistics, which showed an increase in July sales. But closer examination of the numbers showed that the increase was mostly due to an uptick in car and gasoline sales, and the oil price rallies lost steam. With American consumers doing little buying, the chances of an economic recovery gaining momentum remain slim. With this in mind, as well as the host of bearish news that emerged this week, traders held off of oil buying in the later part of the day and crude and heating oil both closed slightly lower.
Today’s Closing Prices on the NYMEX
Crude oil (September 2010 contract): Down 0.4 percent, $75.43 a barrel
Heating oil (September 2010 contract): Down 0.2 percent
Afternoon Price Check, August 12: Oil Prices Continue Slide as Unemployment Rises
Swollen oil supplies, a weak stock market, and downbeat economic news from the US and China sent oil prices falling for the third straight day. (image: ft.com)
The latest evidence that the US economy is still recovering slowly from the recession, a rise in unemployment claims helped oil prices continue their steep decline on Thursday. The jobs report came on the heels of falling stock market indexes and Wednesday’s report of surprise increases in gasoline and distillate fuel stockpiles, all of which combined to send crude and heating oil prices plunging. News of slowing economic growth in China, the world’s second-biggest consumer of crude oil after the US, also put downward pressure on prices. Major drops in oil prices on the NYMEX today will likely bring even larger declines in retail heating oil prices tomorrow than were seen this morning.
Today’s Closing Prices on the NYMEX
Crude oil (September 2010 contract): Down 2.9 percent, $75.74 a barrel
Heating oil (September 2010 contract): Down 3.5 percent
Some Mass. Heating Oil Customers Sticking to Price-Lock Contracts
A select few heating oil customers in Massachusetts and around the Northeast are dedicated to seeking out price-lock contracts this season. (image:miamiangelproperties.com)
On Tuesday, HeatingOil.com reported on heating oil dealers in Massachusetts not offering price-locks contracts to customers this coming heating season (a trend we first covered this year in Connecticut).
However, a recent report from a Massachusetts TV station highlights the other side of the story—customers who actively seek out price-lock heating oil contracts. WGGB in Springfield reported on Friday that a small but determined group of heating oil users in Massachusetts is contacting local dealers in search of price-lock contracts. Co-owner Lisa Benoit of Bay State Fuel Oil Inc. described the price-lock seekers this way:
There are a select group of customers out there that really want to lock in their pricing, they feel more protected that way.
Although adherents to price-lock contracts are out there, the WGGB report acknowledges that they are in the minority. Many heating oil users who entered into price-lock contracts in the summer and fall of 2008 were scared away from the contracts for good after watching in frustration as market prices plummeted. But this season’s fans of the contracts likely understand that 2008 was an unlikely worst-case scenario and have grown accustomed to the predictability of price-lock arrangements. Ms. Benoit explained the point of view,
We’ve been doing this now for about 20 years, 2008 was really the only year that there was any kind of significant loss to customers.
Because fewer heating oil dealers are offering the contracts this year, price-lock devotees may find it difficult to find the agreement they want. But a few phone calls to local dealers will likely turn up a dealer like Benoit, who is already prepared to take on a handful of price-lock customers for the season.
If you are a heating oil dealer or consumer interested in price-lock contracts, let us know why in the comments section below.
Afternoon Price Check, August 11: Inventory Builds Send Oil Prices Tumbling
A bearish inventory report from the EIA pushed down oil prices on NYMEX. (image: ft.com)
The US Energy Information Administration’s (EIA) inventory reports released this morning showed substantial increases in stockpiles of gasoline and distillate fuels (which include heating oil), and the news caused oil prices to plunge. The price of crude fell $2.23 per barrel, causing it to close well below the $80 level and marking the steepest two-day decline in five weeks. Although the inventory report showed that crude oil supplies fell by 3 million barrels, the news of a 400,000-barrel increase in gasoline supplies and whopping 3.5-million-barrel increase in distillate supplies overshadowed the crude figures and underscored extremely weak demand for petroleum products. News that Chinese investment in manufacturing fell and a warning from the International Energy Agency that weak economies could cancel out any oil demand increases this year also contributed to falling prices. Major decreases in crude and heating oil prices on the NYMEX will likely bring another substantial decline in retail heating oil prices on Thursday.
Today’s Closing Prices on the NYMEX
Crude oil (September 2010 contract): Down 2.8 percent, $78.02 a barrel
Heating oil (September 2010 contract): Down 2.4 percent
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