Crude oil prices drop on low demand for heating oil
With US inventory reports delayed until Thursday due to Monday’s New Year’s Day holiday, crude oil prices were lower Wednesday as mild weather continued to suppress demand for heating oil and natural gas. The demand for heating oil is projected to be one-third lower than normal this week. Last week’s demand was said by the US National Weather Service to be around 23 percent below normal. When the stockpiles data is released, it is expected to show that inventories are up, although analysts disagree by just how much.
At around noon, February contracts for West Texas Intermediate crude were $2.30 lower, to $58.75 per barrel on the New York Mercantile Exchange. Nymex February heating oil was down 5.57 cents to $1.5925 per gallon. Natural gas, meanwhile, had dropped 7.9 cents to $6.22 per million British thermal units. New York Harbor reformulated gasoline blendstock for oxygen blending (RBOB) was 4.63 cents lower to $1.57 per gallon. RBOB has replaced unleaded gasoline futures on Nymex.
The price declines came even though tensions around the dispute over Iran’s nuclear ambitions remain high. Iran’s president said in a televised speech that the sanctions placed on his nation by the UN because of its refusal to halt or cut back its enrichment of nuclear fuel are “invalid”. He also reiterated his view that Iran has a right to develop nuclear technology.