Oil Prices Slump on News of Oil Trading Investigation

News came out late yesterday that the Commodities Futures Trading Commission is investigating a crude trade made by the United States Oil Fund on NYMEX earlier this month. Analyst Olivier Jakob of Petromatrix spoke to CNBC about the investigation: “The CFTC’s investigation of US Oil Fund could put pressure on WTI because the positions it had in the market were very large. It was a late development yesterday that figured after the market was already closed,” Jakob said. The negative news pushed down the price for a barrel of crude 4.5 percent to $43.20. The price of heating oil tumbled 4 percent.

High compliance by OPEC with its agreed-to production cuts was still in the mind of traders and analysts as reason to expect more increases in oil prices next week. JP Morgan oil analysts explained their position: “With the impact of OPEC production cuts clearly being felt in the markets, we anticipate continued bullishness in the coming week with refinery runs expected to rise sharply, resulting in a crude draw.”

However, deeper declines in oil prices could be seen today as markets react to economic data slated to be released this afternoon, including Europe’s unemployment and inflation numbers for January and U.S. fourth-quarter GDP. These data are widely expected to show still-shrinking economies on both sides of the Atlantic.

HEAT USA price experts confirmed yesterday’s prediction of another moderate increase in retail heating oil prices, but expected market prices to stay low today, resulting in a moderate-to-large drop in retail prices on Monday.

HEAT USA Price Report
Today’s average retail heating oil price per gallon: UP $0.05 to $0.06
Morning projection (for Monday’s average retail price per gallon): DOWN $0.04