Oil Prices Fall on Inventory Increases

As of 8:51 am EDT, the price of crude had dropped by 1.4 percent to reach $82.54 a barrel and the price of heating oil had declined by 0.5 percent.

HEAT USA Price Report

Today’s average retail heating oil price per gallon: Up $0.03
Morning projection (for Friday’s average price per gallon): Down $0.02

Oil inventories grew unexpectedly last week, according to the EIA, and this latest sign of oversupply has pushed oil prices down. Crude oil inventories had been forecast to drop, and instead added 1.9 million barrels. Supplies of gasoline and distillates, which include heating oil and diesel, were expected to increase, but not by as much as the EIA concluded. Distillate inventories grew by 2.1 million barrels, and gasoline by 3.6 million barrels. The price of heating oil did not respond to the inventory data on Wednesday, and instead rose substantially on renewed jet fuel demand as European air travel resumed. Heating oil futures are traded as a substitute for jet fuel, so the shutdown and reopening of European airspace had particular impact on heating oil prices.

HEAT USA price experts report that traders and analysts are expressing concern over the latest supply build, which reaffirms that oil demand in the US remains weak, despite expectations to the contrary. If traders continue to focus on supply and demand, oil prices will sink further.