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

Declines in the dollar helped lift crude and heating oil prices on Wednesday, brining higher retail prices on Thursday. (images: slate.com, Nicholas Whitaker for HeatingOil.com)

Oil prices continued their upswing on Thursday, supported by a retreating dollar and rising stock values in the US. Fundamental forces, on the other hand, continue to offer little support to prices as sluggish economic growth has kept demand low and supplies full to almost overflowing for months; Wednesday’s petroleum inventory report from the federal Energy Information Administration showed increases in inventories of all three categories of petroleum products. That fact points to recent gains by crude, heating oil and gasoline on the commodities market being short-lived. Beginning on Wednesday and continuing through Thursday morning however, prices have been rising sharply and lifting retail heating oil prices along with them in what some analysts are calling an upside correction. A new jobs report due out on Thursday, if it shows another substantial increase in unemployment claims, could deflate the mini-rally and send prices falling on Friday.

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

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

A weak dollar and surging stock markets lifted crude and heating oil prices at the NYMEX on Tuesday. (image: Nicholas Whitaker for HeatingOil.com)

On Tuesday, a stock market rally and a weak US dollar brought on a sharp increase in crude and heating oil prices on the NYMEX that produced a four-cent increase in retail heating oil prices around noon. But a weekly inventory report released by the American Petroleum Institute (API) later in the day showed a surprising build in all three categories of petroleum products (crude, gasoline, and distillates, which include heating oil), each by several million barrels. This news caused a rapid market turnaround on Wednesday morning that could lead to substantial decreases in crude and heating oil prices if the inventory report released by the Energy Information Administration (EIA) confirms the data in the API report. Inventory increases represent a lack of consumption of petroleum that can be traced to a US economy that is still hurting from the worldwide recession that began two years ago. If the EIA report corroborates the findings in the API report, expect crude and heating oil prices to drop sharply through the end of the week.

Today’s average retail heating oil prices in the Northeast is unchanged from Tuesday afternoon’s price.

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

As the stock markets advanced they pushed up crude and heating oil prices. (image: Nicholas Whitaker for HeatingOil.com)

Oil prices rose on Monday in response to stock market gains, a sign of economic recovery. Since growth in oil demand is dependent on economic growth, any positive economic news supports higher oil prices. However, conflicting economic news limited the rise in the price of crude oil and heating oil. Oil prices surged in the middle of the day on Monday as the stock market rose, but dropped in the afternoon after a survey by the National Association of Home Builders showed that home builders’ confidence was at its lowest level since August 2009. Oil still finished higher on the NYMEX, but only enough to bump the average retail price of heating oil up one penny.

Today’s average retail heating oil price in the Northeast is 1 cent higher than Monday’s average price.