Oil Prices Fall as China Restricts Lending

As of 8:50 am EST, the price of crude had dropped by 1.8 percent to reach $77.58 a barrel and the price of heating oil had fallen by 1.5 percent.

HEAT USA Price Report

Today’s average retail heating oil price per gallon: No Change
Morning projection (for Thursday’s average price per gallon): Down $0.04

Oil prices fell as China instructed banks to stop new lending for the rest of January, which will slow down China’s economic growth—a factor many investors are counting on to boost global oil demand and lift prices. With warm weather in the Northeast, heating oil demand is down, and this week’s inventory reports—delayed one day because of the holiday—are expected to show builds in crude oil and distillates, the category of fuel that includes heating oil. A strong dollar has further discouraged investment in oil futures.

HEAT USA price experts report that economic data from China will be released tomorrow, and could support higher oil prices. However, if inventories climb as expected, those growing supplies will weigh on oil prices and mitigate the effect of positive economic news.