Along with other factors, the euro's plunge following Greece's escalating debt situation has indirectly lowered oil prices. (image: www.europeanbusiness.gr and Nicholas Whitaker via heatingoil.com)

A strong dollar pushed down the crude and heating oil prices on Thursday. The euro fell against the dollar on news that Greece, whose deficit crisis has battered the euro over the past month, may have to turn to the International Monetary Fund for a bailout. As the dollar gets stronger, commodities that are priced in dollars (like crude oil and heating oil) become more expensive for traders who hold other currencies, which lowers demand and prices. Weekly inventory reports and OPEC’s meeting on Wednesday generated conflicting interpretations, leaving the value of the dollar to lead oil prices.

Today’s average retail heating oil price in the Northeast is 2 cents lower than Thursday’s average price.

(image: s.wsj.net and Nicholas Whitaker via heatingoil.com)

Oil prices continued to be buoyed by the Federal Reserve’s announcement on Tuesday that interest rates would be kept at low levels, which contributed to a weaker dollar yesterday. Because crude and heating oil futures are priced in dollars, a weak dollar makes them cheaper for investors who hold other currencies and drives up demand. Higher oil prices got further support from the EIA’s inventory report, which showed a decline in supplies of distillates, which include heating oil and diesel, and in supplies of gasoline. Despite rising crude inventories, traders took this as a sign of growing demand. OPEC also announced that it would maintain its current production quotas, even as it anticipates growing global oil demand.

Today’s average retail heating oil price in the Northeast is 2 cents higher than Wednesday’s average price.

(image: electricscotland.com and Nicholas Whitaker via heatingoil.com)

A late rally in crude oil prices late in the trading day on Tuesday has brought higher St. Patrick’s Day heating oil prices this morning. Anticipation of the US Federal Reserve preserving interest rates at its meeting yesterday and OPEC holding production quotas steady at its meeting today helped drive up market prices on Tuesday. The trend continued this morning, partially in response to the Fed’s announcement that it will keep interest rates low and added comment that the economic state of the country is “likely to warrant exceptionally low levels of the federal funds rate for an extended period.” Additional price support came from OPEC, as comments by cartel ministers made it clear the organization is perfectly content with current oil prices and will not adjust production quotas at its meeting later today.

The API’s weekly inventory report, released yesterday, showed a smaller-than-anticipated build in US crude inventories, adding even more upward support to prices. Today’s inventory report from the EIA will further extend or mitigate that support. With three major events aligned in lifting oil prices, chances are heating oil prices will continue to increase for the next two days or more, despite warm weather along the East Coast.

Today’s average retail heating oil price in the Northeast is 6 cents higher than Tuesday’s price.

(image: welt.de and zimbio.com)

Caution reigned in oil markets on Monday, as traders played it safe ahead of announcements to come this week from the Federal Reserve and OPEC. Any word from the Fed on interest rates will move the dollar, and commodities prices tend to move inversely to changes in the dollar. OPEC is widely expected to maintain its production quotas, but since its members are producing more oil than allowed by quotas, markets will pay close attention to any statements regarding OPEC members’ compliance with quotas. An emphasis on compliance could shrink global oil supplies and lift prices, but if OPEC is content with compliance then that could be seen as giving a free pass to OPEC nations to boost production. The Fed meets today and OPEC meets on Wednesday, which could create a volatile two days for crude and heating oil prices.

Today’s average retail heating oil price in the Northeast is 3 cents lower than Monday’s average price.

(image: BenjaminJoel via flickr.com and life.com)

Oil prices fell at the end of the week as a report showed that consumer confidence in the US had declined. Weak consumer confidence in the US points to sluggish energy demand from the world’s largest oil consumer. While oil demand remains low in the US, it appears to be picking up overseas; the IEA revised its previous estimate for world energy demand in 2010, increasing it slightly, based largely on forecasts for continued economic growth in China. Potential Chinese oil demand helped oil markets stem their losses, but weak demand right now in the US pushed down the prices of crude and heating oil on Friday.

Today’s average retail heating oil price in the Northeast is 2 cents lower than Friday’s average price.

Fears for the effect of Chinese inflation mitigated the price rise that would have come with Wednesday's inventory report. (image: telegraph.co.uk and zimbio.com)

Oil prices ended Thursday where they started, as Wednesday’s news on US demand—inventory reports that showed declining supplies of refined oil products pointed to some growth in oil demand—continued to support higher oil prices, but was counteracted by news from China, the world’s second-largest consumer of oil. China’s inflation hit a 16-month high, which could lead Chinese authorities to change monetary policy and curtail lending. If that happens, China’s economic growth will slow, as will its rising energy demand. Prospects of sluggish demand in China weighed on crude and heating oil prices and kept them from rising on Thursday.

Today’s average retail heating oil price in the Northeast is unchanged from Thursday’s average price.

(image: thaienergy.org and zimbio.com)

Inventories of refined oil products fell much more than expected and signaled to oil traders that demand was beginning to cut into abundant oil supplies. Inventories of distillates, which include heating oil and diesel, fell by 2.2 million barrels, and gasoline supplies dropped by 2.9 million barrels. Lower refinery rates contributed to shrinking oil inventories; refiners operated at 80.7 percent of capacity last week. Some investors hesitated to push oil prices up too much, because the balance of supply and demand could be upset if refiners increased output, which would quickly oversupply the market and bring prices down.

Today’s average retail heating oil price in the Northeast is 2 cents higher than Wednesday’s average price.

(image: welt.de and life.com)

The price of crude oil closed at an eight-week high on Monday, and heating oil futures on NYMEX perked up as well, but gains in the market were too small to have much impact on retail prices. Expectations of economic improvement—still driven by Friday’s relatively positive jobs report—supported higher oil prices, but price increases were tempered by a stronger dollar. As the value of the dollar rises, commodities price in dollars become more expensive for traders holding other currencies, which lowers demand and puts pressure on prices to fall. The fundamentals of supply and demand still point to lower oil prices, and so far this Tuesday traders have been taking notice; this afternoon’s API report and tomorrow’s EIA report could move prices for crude and heating oil.

Today’s average retail heating oil price in the Northeast is unchanged from Monday’s average price.

A slight improvement in job loss numbers boosted oil prices today. (image: seekingalpha.com and Nicholas Whitaker via heatingoil.com)

February jobs numbers in the US came out better than expected, as the economy lost fewer jobs than analysts had anticipated. The jobs report encouraged oil traders that the economy was improving, and oil prices rose sharply on Friday morning. The morning’s price spike for heating oil led to a midday price increase of 4 cents, but the market moderated as the day progressed and heating oil prices ended only 3 cents higher than they began on Friday, 1 cent down from their midday peak.

Today’s average retail heating oil price in the Northeast is 3 cents higher than Friday’s average price.

(image: 2.bp.blogspot.com and Nicholas Whitaker via heatingoil.com)

A strong dollar, boosted by weakness in the euro, pushed down oil prices yesterday. Since crude and heating oil futures are priced in dollars, a strong dollar makes them more expensive for traders who hold other currencies, which drives down demand. Oil supplies remain well above average levels, so oil prices had little support from fundamentals. Oil traders also had some concern about Friday morning’s jobs report, but that report has since been released and non-farm payroll figures were better than expected, lifting oil prices.

Today’s average retail heating oil price in the Northeast is 2 cents lower than Thursday’s average price.