Oil Prices Fall on Strong Dollar, Supply Worries

As of 8:56 am EDT, the price of crude had dropped by 0.5 percent to reach $82.49 a barrel and the price of heating oil had declined by 0.6 percent.

HEAT USA Price Report

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

Yesterday oil prices rose as OPEC kept its production quotas steady (indicating that global oil supply would not increase) and the EIA reported that inventories of refined oil products fell (indicating that demand was growing). However, today oil traders are reevaluating yesterday’s news—prompted by the strong dollar, which tends to lower commodity prices—and finding cause for concern. OPEC didn’t increase quotas, but it also said little about compliance, so some members could continue to violate quotas and pump more oil into the market. Distillate inventories, which include heating oil and diesel, declined, but crude inventories gained 1 million barrels. As oil rallied toward its high points of the year, with crude reaching $82 and $83 per barrel, traders have found reason for caution in persistently weak demand and an oil market in oversupply.

HEAT USA price experts report that the dollar has so far moved oil prices this Thursday, but US economic data will be released later today on weekly jobless claims and February consumer prices that will likely affect all markets.