Heating Oil Rises as Inventories Decline While Demand Picks Up
Heating oil rose on speculation the lowest seasonal level of U.S. distillate inventories since 2004 may shrink further as demand picks up before winter.
Prices gained as inventories of heating oil and diesel probably fell 275,000 barrels last week, according to the median estimate of 10 analysts in a survey by Bloomberg News. The Energy Department is scheduled to report last week’s inventories at 10:30 a.m. tomorrow in Washington. Stockpiles were 123.5 million as of Aug. 3, 19 percent below a year earlier, department data show.
“Heating oil is strong because inventories are so low and winter’s coming,” said Addison Armstrong, director of market research at Tradition Energy in Stamford, Connecticut. “We’ve got quite a lot of heating oil we’re going to need to make.”
Heating oil for September delivery rose 1.63 cents, or 0.5 percent, to settle at $3.0346 a gallon on the New York Mercantile Exchange. (CME)
Recent refinery outages could be contributing to declining inventories, said Phil Flynn, senior market analyst at Price Futures Group in Chicago.
“All of that seems to suggest production of heating oil and diesel is going to be a little less than it should be,” Flynn said.
September-delivery gasoline rose 1.07 cents, or 0.4 percent, to $3.0014 a gallon on the exchange.
Inventories probably fell 2 million barrels last week, the median estimate of 10 analysts in a survey by Bloomberg News.
Regular gasoline at the pump, averaged nationwide, rose 1 cent to $3.702 a gallon yesterday, AAA data showed. That’s the highest level since May 17. Prices have climbed 37.6 cents since July 1, according to data from the nation’s largest motoring organization.
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