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

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

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

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

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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