By Barbara Powell
DALLAS - Heating oil gained on forecasts for colder-than-normal weather in the U.S. Northeast next week at a time when supplies of the fuel are declining.
Futures rose as temperatures in the Northeast and eastern Canada are expected to fall 8 to 14 degrees below normal from Jan. 23 to 27, according to MDA Weather Services in Gaithersburg, Maryland. East Coast heating oil supplies fell a fifth consecutive week through Jan. 11 and are 42 percent below a year earlier, data from the U.S. Energy Information Administration show.
“Heating oil continues to be supported by cold weather in the U.S. and Europe,” said Andy Lipow, president of Lipow Oil Associates LLC in Houston.
Heating oil for February delivery rose 1.43 cents, or 0.5 percent, to $3.0355 a gallon at 9:45 a.m. on the New York Mercantile Exchange. Volume was 21 percent above the average of the past 100 days.
The premium of February delivery futures over the March contract increased 0.38 cent to 1.05 cents a gallon. The increasing backwardation can indicate greater demand for near- term delivery or tighter supply.
The National Weather Service’s Climate Prediction Center estimated lower-than-normal temperatures in the U.S. Northeast from Jan. 23 to Jan. 27.
Gasoline for February delivery slipped 0.1 cent to $2.7674 a gallon on the exchange. Volume was 11 percent below the average.
The retail price for regular gasoline, averaged nationwide, rose 0.1 cent to $3.293 a gallon, AAA said today on its website. That’s the first increase in seven days.