HEATING OIL NEWS
Todays oil prices - Daily oil price
NEW YORK – For the past several months, heating oil prices have soared on the expectation that China would soon lead a new race for natural resources.
But government data released so far this year has told a different story, and oil has tumbled nearly $10 a barrel in the first month of 2010.
Americans are burning less gasoline than they did a year ago, according to a report this week from the Energy Information Administration. The EIA says the country's appetite for petroleum products has dropped every week this month. And while China should expand petroleum consumption this year, a decision to rein in risky bank loans and cool down its economy may curb China's energy appetite.
"What's been driving oil prices is the promise of Chinese economic growth," said Phil Flynn, an analyst with PFGBest. "But its demand numbers are very suspect right now."
All of this means consumers could enjoy cheaper gasoline and lower heating bills, though it usually takes an extended turn in energy futures prices for the discount to trickle down to the retail level.
Since the start of the year, benchmark crude prices have sunk 11 percent. The contract for March delivery gave up another 75 cents Friday to settle at $72.89 a barrel on the New York Mercantile Exchange.
Other energy prices have also slumped in January. Heating oil and natural gas prices have fallen 13 percent each this year, while gasoline futures dropped 10 percent.
Prices continued falling Friday even after the Commerce Department reported a 5.7 percent annual growth rate in the fourth quarter, the fastest pace since 2003.
The expansion, which was driven by rising exports and business spending on equipment and software, may suggest that an increase in energy consumption is around the corner. But analysts said investors need to see more concrete evidence that it's going to happen.
"This could be more of a warning signal," Michael Lynch, president of Strategic Energy & Economic Research, said of the EIA report. The economic growth rate is expected to cool later this year, Lynch said, and "it's scary to think where oildemand will be then."
The dollar also strengthened for a fourth straight day as financial troubles in Greece, Spain, Portugal and Ireland pushed the euro lower. Crude, priced in U.S. currency, tends to fall as the dollar rises and makes oil barrels moreexpensive to buy for investors holding foreign currency.
At the pump, retail gasoline prices continued to slide as well, giving up a half penny overnight to a new national average of $2.685 a gallon, according to AAA, Wright Express and Oil Price Information Service. Gasoline has been falling for more than two weeks, but a gallon of regular unleaded is still 6.2 cents more expensive than it was a month ago and 84.2 cents higher than the same timelast year.
In other Nymex trading in February contracts, heating oil fell 1.62 cents to settle at $1.9029 a gallon and gasoline lost 1.43 cents to settle at $1.9031 a gallon. The March contract for natural gas fell less than a penny to settle at $5.131 per1,000 cubic feet.
In London, Brent crude for March delivery dropped 67 cents to settle at $71.46 a barrel on the ICE Futures exchange.
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