Heating Oil Prices Plummet Amid Unusually Cold Weather

An unusual cold snap in the Midwest and Northeast has failed to prevent a massive sell-off of heating oil, leading to lower prices despite increased demand. The sell-off on January 18, 1994, was largely driven by profit-taking and the expectation of a return to normal temperatures. As a result, heating oil futures prices dropped significantly, with February No. 2 heating oil futures falling by 3.18 cents per gallon on the New York Mercantile Exchange and gas oil futures falling by $7.25 per metric ton on London's International Petroleum Exchange.

Key Takeaways:

• The sell-off of heating oil on January 18, 1994, led to lower prices, with February No. 2 heating oil futures falling by 3.18 cents per gallon to 49.49 cents per gallon on the New York Mercantile Exchange.
• Profit-taking and the expectation of a return to normal temperatures motivated the sell-off, despite unusually cold weather in the Midwest and Northeast.
• February gas oil futures fell by $7.25 per metric ton to $144.75 per ton on London's International Petroleum Exchange.
• Natural gas futures and crude oil futures for February delivery also declined, with the West Texas Intermediate (WTI) crude oil futures falling by 23 cents per barrel to $14.87.
• The United Nations renewed sanctions on Iraqi exports for another 60 days, but this had no market impact.
• Oil companies sharply raised distillate wholesale prices, boosting No. 2 by 1.48 cents per gallon to 53.20 cents per gallon and raising low-sulfur diesel by 1.44 cents per gallon to 53.54 cents per gallon.
• Unleaded regular gasoline was nearly unchanged, rising by 0.01 cents per gallon to 47.20 cents per gallon.

Statistics:

• February No. 2 heating oil futures fell by 3.18 cents per gallon to 49.49 cents per gallon on the New York Mercantile Exchange.
• Gas oil futures fell by $7.25 per metric ton to $144.75 per ton on London's International Petroleum Exchange.
• Natural gas futures dropped by 7 million British thermal units (MMBtu) to 2.318 MMBtu.
• West Texas Intermediate (WTI) crude oil futures fell by 23 cents per barrel to $14.87.
• March North Sea Brent futures fell by 20 cents per barrel to $13.89 on the International Petroleum Exchange.

Sources:

• The New York Mercantile Exchange (Nymex)
• London's International Petroleum Exchange (IPE)
• The Oil Daily
• Computer Petroleum Corp.
• The American Petroleum Institute
• Energy Information Administration