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Petroleum

Heating Oil Prices Reach Three-Year Highs Amid Northeast Cold Snap

Strategic Insights

— 1 min read

A severe cold snap in the Northeast is driving heating oil prices to a three-year high, with the near-month contract on the New York Mercantile Exchange (Nymex) settling up 1.12 cents at 59.11 cents/gallon. The January crude contract on Nymex also reached a six-month high, settling up 16 cents at $19.67/bbl, ahead of its expiration. The cold weather and strong natural gas prices have traders optimistic about the market's technical outlook, with some analysts predicting that heating oil prices will encounter short-term resistance at 60 cents/gallon but remain well above support levels.

Key Takeaways:

  • Heating oil prices reached a 33-month high, driven by the cold snap in the Northeast, with the near-month contract settling up 1.12 cents at 59.11 cents/gallon.
  • The January crude contract on Nymex reached a six-month high, settling up 16 cents at $19.67/bbl, ahead of its expiration.
  • Natural gas prices on Nymex also reached new 22-month highs at $2.515/MMBtu, lending support to the heating oil market.
  • Analysts like Timothy P. Evans and a second New York-based source are bullish on heating oil, citing strong momentum and length in noncommercial positions.
  • Paribas Futures Inc. Vice President Ric Navy predicts strong prices through the end of the year for crude oil.
  • Gasoline prices also reached a six-month high, settling at 59.93 cents/gallon, up 0.34 cents from Friday.

Statistics:

  • Heating oil prices increased by 7.18 cents since Dec. 1.
  • The January heating oil contract is trading more than 10.5 cents higher than year-ago prices.
  • Natural gas prices on Nymex settled up 14 cents at $2.504/MMBtu, touching new 22-month highs at $2.515/MMBtu.
  • The January/February calendar spread widened 2 cents to 56 cents.
  • Crude prices on the Nymex settled up 16 cents at $19.67/bbl, a new six-month high.

Sources:

  • [Source: various traders and analysts quoted in the article]
  • [Source: New York Mercantile Exchange (Nymex) price data]
  • [Source: Colonial Pipeline Co. announcement]
  • [Source: Pegasus Econometric Group]
  • [Source: Paribas Futures Inc.]

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