Oil traders at the NYMEX reacted bearishly to Friday's jobs report, bringing lower retail heating oil prices on Monday. (images: Nicholas Whitaker for HeatingOil.com)

July unemployment data from the Department of Labor that on Friday showed the second straight month of negative job growth kept oil prices down on the final trading day of last week. The jobs report sent crude and heating oil prices downward after an otherwise upbeat week of trading, but the price of crude remained above the psychological benchmark of $80 per barrel. The loss of 131,000 jobs in July underscored the slow recovery of the US economy and intensified fears of a double-dip recession, both of which contributed to oil traders’ pessimism on the state of the US economy and brought moderate-to-large decreases in oil prices on the NYMEX on Friday. The result is significantly lower retail heating oil prices today, though market prices are currently on the rebound.

Today’s average retail heating oil price in the Northeast is 4 cents lower than Friday’s average price.

Crude oil prices swung slightly lower today. (image: ft.com)

This morning’s declining trend in oil prices continued for most of the day, bringing moderately lower crude and heating oil prices at the market’s close. The market continued to digest the bearish fundamentals presented in yesterday’s inventory report from the EIA that showed a surprise increase in gasoline and distillate inventories at a time of year that usually brings higher fuel demand. A new government report showing an uptick in new jobless claims last month also contributed to falling oil prices by casting further doubt on prospects of a speedy economic recovery. “The direct fundamentals for the market are bearish and today’s prices are finally trying to reflect that fact,” Tim Evans, energy analyst at Citi Futures Perspective in New York told CNBC.

Today’s Closing Prices on the NYMEX

Crude oil (August 2010 contract): Down 0.6 percent, $82.00 a barrel
Heating oil (August 2010 contract): Down 0.7 percent

Slower than expected GDP growth pushed down oil prices on Friday. (image: ft.com)

Oil prices fell early in the morning on the news that US GDP grew more slowly than expected in the second quarter. The Commerce Department’s report had an immediate impact on the oil market, but crude oil and heating oil prices have since pared their losses, moving close to even for the day. Oil prices have gotten some support from a weak dollar, which makes commodities priced in dollars—like crude oil and heating oil—cheaper for traders who hold other currencies. That makes them more appealing, driving up demand and lifting prices. So far, though, the poor GDP numbers have outweighed the effect of the weak US currency and kept oil prices down.

Today’s prices on the NYMEX as of 12:17 pm

Crude oil (September 2010 contract): Down 0.5 percent, $77.94 per barrel.
Heating oil (August 2010 contract): Down 0.3 percent.

Heating oil prices jumped as the value of the dollar plunged. (image: Nicholas Whitaker for HeatingOil.com)

The dollar weakened on Thursday, reaching its lowest point against the euro in 12 weeks and losing ground relative to most other currencies as well. The weak US currency boosted oil prices, since it made crude oil futures and heating oil futures—both of which are priced in US dollars—cheaper and more attractive to traders who hold other currencies. The impact of currency prices overwhelmed the affect of some negative economic news and Wednesday’s report of a massive increase in crude oil inventories. While oil prices have defied bleak economic news on Wednesday and Thursday, Friday’s report that US GDP grew at a slower rate than expected has led oil prices to fall sharply in early trading, and could produce lower retail heating oil prices over the weekend.

Today’s average retail heating oil price in the Northeast is 4 cents higher than Thursday’s average price.

Oil prices climbed as the dollar weakened against other currencies. (image: ft.com)

The dollar weakened considerably on Thursday, helping oil prices rise for the first time in a week. Because crude oil and heating oil futures are priced in dollars, a weak dollar makes them cheaper (and more attractive) for traders who hold other currencies, which in turn supports higher prices. The dollar fell against most other currencies, and hit a 12-week low against the euro. Action in the currency markets drove up oil prices even as stock markets remained flat and inventories remain high.

Today’s closing prices on the NYMEX

Crude oil (September 2010 contract): Up 1.8 percent, $78.37 per barrel.
Heating oil (August 2010 contract): Up 2.2 percent.

Lower consumer confidence in the US drove down oil prices on Tuesday. (image: Nicholas Whitaker for HeatingOil.com)

Oil prices slid on Tuesday on news that consumer confidence had fallen in June. The Consumer Confidence Index, published every month by the Conference Board, a nonprofit research group, showed confidence at its lowest level since February. Lower confidence indicates that economic recovery will likely slow because consumers will curtail spending, and slower recovery cuts into oil demand, thus weighing on oil prices. Prices of crude oil and heating oil have dipped further in early trading on Wednesday, pushed down by the API’s surprising report that crude oil inventories had increased. The release of the EIA inventory figures, due out at 10:30 am, could reverse the direction of oil prices.

Today’s average retail heating oil price in the Northeast is 4 cents lower than Tuesday’s average price.