Stocks Pull Down Oil Prices as Pandemic Fears Continue

Worries about a swine flu pandemic reverberated through stock and commodities markets this morning, pulling down both US stock indices and oil prices.  US inventories of petroleum products remain at record-high levels, with more inventory builds expected to be announced by the EIA in its weekly report tomorrow.  The huge inventories serve as a constant reminder that, in the behind the swine flu scare, a global recession has kept demand for oil products extremely low over the last six months.  That underlying demand destruction coupled with the swine flu’s potential to slow air travel and hinder global commerce led to a moderate fall in crude and heating oil prices this morning.

As of 9:17 am EDT, the price of crude had fallen by 2.7 percent to $48.80 a barrel and the price of heating oil had sunk by 2 percent.

HEAT USA price experts confirmed yesterday’s prediction of a moderate decrease in retail prices today, and expected a smaller price drop to come out of today’s falling market prices.

HEAT USA Price Report
Today’s average retail heating oil price per gallon: DOWN $0.04
Morning projection (for Wednesday’s average retail price per gallon): DOWN $0.02