Heating Oil Declines on Outlook for Warmer Weather in NortheastBarbara Powell
Heating oil slipped for the first time in three days as a forecast for warmer weather in the U.S. Northeast indicated less demand for fuel to heat homes.
Futures declined 0.7 percent as the National Weather Service’s Climate Prediction Center estimated temperatures will be higher than normal across the Northeast from Jan. 8 through Jan. 16.
“The weather is going to be warmer than expected,” said Phil Flynn, senior market analyst at Price Futures Group in Chicago.
Heating oil for February delivery declined 2.12 cents to settle at $3.0251 a gallon on the New York Mercantile Exchange. Volume was 21 percent below the average of the past 100 days as of 2:45 p.m.
Futures also slipped on speculation that inventories of distillate fuels, including diesel and heating oil, will increase. Motiva Enterprises LLC’s Port Arthur, Texas, refinery was scheduled to restart a 325,000-barrel-a-day crude unit today, a person familiar with operations said yesterday.
“Heating oil is being pressured by the weather and the imminent restart of the Motiva Port Arthur crude unit, which will add substantial distillate supply,” said Andy Lipow, president of Lipow Oil Associates LLC in Houston.
The Energy Department is scheduled to report last week’s inventories at 11 a.m. tomorrow in Washington.
The department will probably report that distillate inventories rose 1.25 million barrels, according to the median estimate of 10 analysts in a survey by Bloomberg. Inventories in the week ended Dec. 21 were the highest level since Oct. 6, according to department data.
Gasoline for February delivery rose 0.26 cent to $2.7977 a gallon. Volume was 36 percent below average. Gasoline inventories probably increased 2.2 million barrels last week, according to the survey.
Supplies of the motor fuel jumped 3.78 million barrels in the week ended Dec. 21 to 223.1 million, the highest level since March, according to department data.
The average nationwide retail price for regular gasoline rose 0.1 cent to $3.292 a gallon, AAA said today on its website.