Heating oil prices drop due to European Debt Crisis….Fuel Dump
Gasoline and heating oil fell for the first time in five days on speculation that the European debt crisis may persist, slowing global economic growth and reducing fuel demand.
Futures slipped as the Group of 20 nations refused to raise international lending for Europe to fight its debt crisis, saying that a European review of its financial firewall in March is “essential” before any decision could be made to boost resources for the International Monetary Fund. IMF Managing Director Christine LaGarde said the world economy “is not out of the danger zone.”
“The G-20 is talking about the risk of a global slowdown and Christine LaGarde’s comments raised concerns about a slowing global economy,” said Phil Flynn, vice president of research at PFGBest in Chicago.
Gasoline for March delivery fell 2.45 cents, or 0.8 percent, to settle at $3.1283 a gallon on the New York Mercantile Exchange. Prices have surged 16 percent this year.
March-delivery heating oil declined 2.95 cents, or 0.9 percent, to settle at $3.2864 a gallon on the exchange. Prices have risen 12 percent so far in 2012.
“People are concerned these higher prices are going to slow down the economy,” said Andy Lipow, president of Lipow Oil Associates LLC in Houston.
Regular gasoline at the fuel pump, averaged nationwide, rose 1 cent to $3.698 yesterday, according to AAA data. Prices, which have risen 13 percent this year, were 10 percent higher than a year earlier.