Heating Oil Futures Options Trading
CALL 1-888-456-8090 TO BEGIN TRADING TODAY!INTERNATIONAL INVESTORS CALL 1-541-773-5741
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Heating Oil Futures Options TradingCALL 1-888-456-8090 TO BEGIN TRADING TODAY!INTERNATIONAL INVESTORS CALL 1-541-773-5741 |
Heating Oil Futures: Distillates Rising to 27-Year High in Survey: Energy Markets August 24th, 2010 Heating oil and diesel inventories in the U.S. probably climbed to a 27-year high as the slowing economic recovery curbed demand, a Bloomberg News survey showed. Supplies of the distillate fuels rose 1 million barrels, or 0.6 percent, in the seven days ended Aug. 20 from 174.2 million a week earlier, according to the median of 17 analyst estimates before an Energy Department report tomorrow. The last time supplies were so high was January 1983, two months after the U.S. exited a recession. “We really have some risk that the normal, seasonal uptrend in heating oil prices will be disrupted because of high inventories and weak ongoing demand,” said Tim Evans, an analyst at Citi Futures Perspective in New York. Heating oil fuel supplies surged as the worst recession since the 1930s sapped consumption. Prices dropped today after sales of existing U.S. homes fell 27 percent in July, twice as much as forecast by economists surveyed by Bloomberg News. A report on Aug. 27 will probably show that gross domestic product slowed to a 1.4 percent annual pace in the second quarter, down from an earlier estimate of 2.4 percent. Heating oil futures for September delivery lost 1.86 cents, or 1 0.9 percent, to $1.9368 a gallon at 1:20 p.m. on the New York Mercantile Exchange today, after touching $1.9284, the lowest intraday price since July 7. Futures have fallen 8.6 percent this year. Prices have reached their annual peak in September, October or November in four of the past six years. Heating Oil Speculative CutsHedge funds and other large speculators cut bets on rising prices in heating oil by 87 percent in the week ended Aug. 17, the most since February 2009, according to a Commodity Futures Trading Commission report on Aug. 20.All of the Bloomberg survey respondents forecast an increase in distillate supplies. Gasoline inventories fell 0.2 percent, according to the poll. Refineries probably operated at 89.5 percent of capacity, down 0.5 percentage point from the previous week, the survey showed. “Refiners overestimated demand this summer so we are going into the fall turnaround season with fuel supplies at the highest level in a generation, especially for distillate,” said Stephen Schork, president of consultant Schork Group Inc. in Villanova, Pennsylvania. “You have to go back to the Reagan years to see anything like this.” Heating Oil Total Petroleum StockpilesU.S. stockpiles of oil and fuel climbed 5.3 million barrels to 1.13 billion in the week ended Aug. 13, the highest level since at least 1990, when the Energy Department began to collect weekly data. On a monthly basis, supplies are at the highest level since November 1983.“Demand has been OK this summer, but not as strong as we would usually see coming out of a recession,” said Rick Mueller, director of oil markets at Energy Security Analysis Inc. in Wakefield, Massachusetts. U.S. distillate-fuel consumption peaked at an average 4.96 million barrels a day in 2007, according to the Energy Department. It has averaged 3.72 million barrels a day this year, down 13 percent from the same period in 2007. Demand rose 5.8 percent to 3.534 million barrels a day over the past four weeks from a year earlier. Distillate fuel exports surged to a record 756,000 barrels a day in May, the most recent month available, according to the Energy Department. Heating Oil ‘Bigger Glut’“If it weren’t for exports, we would have an even bigger glut of distillate fuel,” Evans said.U.S. refineries often shut units for maintenance in September and October as gasoline demand falls and before heating-oil use increases. They typically complete those operations during the winter, when distillate demand peaks. Crude stockpiles probably jumped 400,000 barrels, or 0.1 percent, last week according to the survey. “Demand for crude oil will dry up even more than usual this fall as refiners shut units,” Schork said. The U.S. Northeast, where 84 percent of the country’s residential heating oil is used, will probably have above-normal temperatures in September, October and November, according to a National Weather Service report on Aug. 19. The heating season begins in October and ends in March. The Energy Department is scheduled to release its weekly report at 10:30 a.m. tomorrow in Washington. - Mark Shenk in New York at Bloomberg. Click here for your Free Heating Oil Futures Trading eGuide |
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