Heating Oil Falls on Concern U.S. Manufacturing Growth Slowing
Heating oil fell as a report showed manufacturing shrank more than forecast in the New York region, raising concern about the strength of the U.S. economic recovery and fuel demand.
Futures slipped as the Federal Reserve Bank of New York’s general economic index dropped to minus 8.1, the fifth month of contraction, from minus 5.2 in November. Reports on Dec. 14 showed U.S. industrial production rose in November by the most in two years, and China’s manufacturing is expanding at a faster pace in December.
“The good industrial output data that came out on Friday is being tempered by the New York manufacturing index numbers indicating the economy still has a ways to reach some sustained growth,” said Andy Lipow, president of Lipow Oil Associates LLC in Houston.
Heating oil for January delivery fell 2.44 cents, or 0.8 percent, to settle at $2.9563 a gallon on the New York Mercantile Exchange. Prices are up 0.7 percent this year.
The median forecast of 55 economists in a Bloomberg survey called for minus 1 in the New York manufacturing index. Readings of less than zero signal contraction in New York, northern New Jersey and southern Connecticut.
Output at U.S. factories, mines and utilities rose 1.1 percent last month after a revised 0.7 percent drop in October that was more than initially estimated, Fed data released Dec. 14 showed.
Gasoline for January delivery fell 0.75 cent, or 0.3 percent, to settle at $2.6546 a gallon. Prices have fallen 1.2 percent this year.
Gasoline rose 1.95 cents earlier on optimism U.S. budget talks are advancing. President Barack Obama and House Speaker John Boehner met at the White House today to continue negotiations. Obama, a Democrat, and Boehner, the top Republican in the GOP-controlled House are working to avert more than $600 billion in automatic tax increases and budget cuts set to take effect in January.
Boehner in a Dec. 14 offer to Obama signaled openness to allowing tax rates to rise for millionaires after previously opposing increased rates for any income level. Obama, who wants higher rates for incomes above $250,000, rejected that offer.
“Boehner’s given a little on taxes on the wealthy,” said Phil Flynn, senior market analyst at Price Futures Group in Chicago. “It shows we’re making progress on the fiscal cliff and that’s supportive.”
The average nationwide cost for regular gasoline sank 0.9 cent to a $3.248 a gallon, AAA said today on its website. That’s the lowest level since Dec. 27.
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