NEW YORK — Heating oil was little changed on the July contract's last day of trading, after prospects for shortages in coming months sparked a 3 percent rally Thursday.
Low inventories of heating oil last winter sent prices to nine-year highs, and the U.S. could see similar supply levels and prices next winter, John Cook, director of the petroleum division of the Energy Department's Energy Information Administration, said Thursday in remarks prepared for Senate testimony.
"Last March, Cook warned about the coming summer gasoline crunch, which happened," said Phil Flynn, vice president and senior market analyst at Alaron Trading Corp. in Chicago. "Here he is again testifying that even if we build at a normal rate on distillate fuels, we'll have very tight supplies of heating oil come the winter."
Heating oil for July delivery recently was down 0.07 cent at 84.40 cents a gallon on the New York Mercantile Exchange, while the August contract was unchanged at 84.60 cents. Prices are 76 percent higher than a year ago.
The Nymex will be closed on Monday and Tuesday for the Fourth of July holiday.
According to the latest weekly Energy Department inventory report, published Wednesday, distillate supplies, which include heating oil and diesel, were 21 percent below year-ago levels.
In Europe, gasoil futures surged to a nine-year high after an explosion at a Kuwait's largest refinery on Sunday halved the country's production of refined products. Gasoil is the European equivalent of heating oil.
In London, gasoil for July settlement rose $4.25, or 1.7 percent, to $255.75 a metric ton on the International Petroleum Exchange, after earlier rising to $256.50, its highest since the Persian Gulf War in 1991. Prices are 83 percent higher than a year ago. Crude oil for August delivery was little changed at $32.67 a barrel, 5 cents lower on the Nymex.
A Saudi Arabian oil ministry official said that OPEC could raise production levels for a third time this year, even before it meets next in September, if prices don't fall. The official said the Organization of Petroleum Exporting Countries prefers a price of $25 a barrel for an index of oils it monitors, which is equivalent to about $27.30 for New York-traded crude oil.
While the statement came from the group's most influential member, it echoed earlier comments from other OPEC officials and had little impact on prices.
"Even in the case of crude oil, we're dominated today by the product expiration" and trading aimed at lessening risk over the four-day holiday, said Tim Evans, senior energy analyst at IFR Pegasus in New York.
The expiring July gasoline contract was recently down 0.2 cent at $1.0485 a gallon on the Nymex while the more actively traded August contract was 0.43 cent up at $1.018.