Heating oil tumbled to a four-month low as forecasts for mild temperatures indicated weaker demand for the home heating fuel.
Futures fell 0.7 percent after Commodity Weather Group LLC in Bethesda, Maryland, predicted normal or warmer-than-normal weather in most of the lower-48 states through Dec. 24. The low in New York on Dec. 15 may be 40 degrees Fahrenheit (4 Celsius), 8 higher than the usual reading, according to AccuWeather Inc. in State College, Pennsylvania.
“This lack of early season cold is certainly pulling down the nat gas market, and that’s called attention to the weather, pulling some long liquidation out of heating oil,” Tim Evans, an energy analyst at Citi Futures Perspective in New York, said in a phone interview. “So blame it on Mother Nature.”
Heating oil for January delivery fell 1.91 cents to $2.8962 a gallon on the New York Mercantile Exchange. It’s the lowest settlement since Aug. 2.
Gasoline for January delivery pared earlier gains to settle 0.07 cent higher at $2.5981 a gallon, after falling 5.9 percent last week.
Futures advanced as much as 1.6 percent earlier after President Barack Obama met with House Speaker John Boehner yesterday to negotiate a deal to avert more than $600 billion in automatic spending cuts and tax increases known as the fiscal cliff. Representatives for the White House and Boehner issued identical statements after the meeting that “the lines of communication remain open.”
“The market expects Congress is going to work something out to avoid the fiscal cliff,” said Andy Lipow, president of Lipow Oil Associates LLC in Houston.
The average nationwide cost for regular gasoline fell 0.7 cent to a $3.34 a gallon, AAA said today on its website. That’s the lowest level since July 4. The pump price reached a 2012 high of $3.936 on April 4.
The Energy Department’s weekly report Dec. 12 will probably show gasoline inventories rose 2 million barrels last week, according to the median estimate of seven economists surveyed by Bloomberg. Distillate inventories probably grew by 1.5 million barrels.
Gasoline inventories increased 7.86 million barrels and distillates by 3.03 million barrels the week ended Nov. 30.