Crude and heating oil prices maintained high levels reached after an opening dip this morning. Crude oil gained nearly 4% to reach $46 a barrel and heating oil gained 2.5%. Concern over Russia as a reliable source of energy intensified as the market mulled the implications of the second-largest oil-producer’s decision to cut off natural gas supplies to Ukraine after a contract disagreement. Fog off of the U.S. Gulf Coast kept incoming oil tankers from reaching refining facilities in Louisiana. The U.S. stock market also helped support higher oil prices by a strong showing today, reaching a two-week high as investors hoped that the worst trading days during this 2008-2009 recession are over.

HEAT USA price experts regretted to report another price increase for Monday, noting an increase of almost 30 cents since the beginning of this week.

HEAT USA Price Report
Evening projection (for Monday’s average retail price per gallon): UP $0.04

Persistent concerns over dwindling energy demand caused by recessions in the world’s wealthiest nations appeared to dominate the oil markets this morning. Crude was down 2% and heating oil had lost three-quarters of a percent as of 9:27 am eastern time. Crude oil opened the day at $45.95 a barrel, touching near a four-year low point. With no new oil demand or production data to be released today, general indicators of the state of the world economy have the most influence on oil prices. World stock markets are the main indicator of economic health.

From CNBC.com: “’With the oil market looking at equity markets for guidance, you need these to stabilize first before the oil market itself can recover,’ said Harry Tchilinguirian, analyst at BNP Paribas.”

Major U.S. stock indices were down as of 9:37 am on news of layoffs from DuPont and AT&T as well as weak retail numbers throughout the U.S.

HEAT USA price experts confirmed a steady retail price of heating oil from Wednesday, and predicted a small-to-moderate drop in Friday’s prices.

HEAT USA Price Report
Today’s average retail heating oil price per gallon: NO CHANGE
Morning projection (for Friday’s average price per gallon): DOWN $0.03

The U.S. government’s rescue of struggling financial institution Citigroup gave a boost to the stock market this morning, sending the Dow Jones Average up 0.6% to 8113.25 as of 9:44 am eastern time.  A cautiously resurgent stock market helped to lift oil prices, with crude and heating oil up 3% and 2%, respectively.  Anticipation of a second major production cut by OPEC (which will meet informally in Cairo on November 29th) before the end of the year also contributed to slowly climbing oil prices.

Forbes.com noted that falling temperatures and a rising stock market in Europe may have helped lift oil prices as well.

HEAT USA price experts confirmed the small increase in retail heating oil prices from last Friday, and expected a larger increase in tomorrow’s prices as a result of rising market prices today.

HEAT USA Price Report
Today’s average heating oil price per gallon: UP $0.02 to $0.03
Morning projection (for Tuesday’s average price per gallon): UP $0.05

Crude oil gained about 1% today to settle at $49.93 a barrel and heating oil gained over 1% to close $0.02 higher at $1.70.  The slight recovery in oil prices following yesterday’s 7% plunge in the price of crude followed the stock market, which posted its own recovery with the Dow Jones Average closing 3% up at 7894.45.

Breaking news that President-Elect Barack Obama will choose New York Federal Reserve President Timothy Geithner as his Treasury Secretary sparked a huge jump in stocks minutes before the closing bell.  Uncertainty remained the only sure bet for oil prices, however, leading analyst Stephen Schork to quip in an Associated Press article, “At this point, all we can say with any degree of confidence is that crude oil … will not trade below zero.”

HEAT USA price experts predicted a small increase in Monday’s retail prices as a result of today’s market increase.

HEAT USA Price Report
Evening projection (for Monday’s average price per gallon): UP $0.02 to $0.03

Crude oil prices plunged 3% this morning to just a few cents above the $50 a barrel mark.  Heating oil followed, losing about 3% to $1.70 per gallon.  New economic data showing skyrocketing unemployment and a significant drop in consumer prices worsened market pessimism amid worldwide recession and shrinking energy demand.

From CNBC.com:

“Weakness in stocks reflects weakness in the economy at the moment looking forward, but I think the general trend in oil is lower anyway,” said Sucden’s head of research Michael Davies.”It’s a bit of a chicken or egg thing. Everything’s moving together, it’s hard to say what’s leading,” Davies said.

HEAT USA price experts confirmed the expected increase in average retail prices for heating oil this morning, and predicted moderate-to-large declines in tomorrow’s prices following the market slide.

HEAT USA Price Report
Today’s average heating oil price per gallon: UP $0.005 to $0.01
Morning projection (for Friday’s average price per gallon): DOWN $0.05

The price for a barrel of crude touched a 22-month low of $54.13 early this morning before inching upward to $55.85 as of 9:54 am eastern time.  Heating oil was also up a fraction, to $1.80 per gallon at 9:57 am.

The stock market appears to be the main motivator for the small upswing in oil prices, mostly due to the lack of new supply and demand data today.  The Dow Jones Industrial Average was up a fraction of a per cent to 8329.17 as of 9:50 am.

HEAT USA price experts confirmed a small drop in retail heating oil prices this morning, and predicted a small price increase tomorrow.

HEAT USA Price Report
Today’s average heating oil price per gallon: DOWN $0.03 to $0.04
Morning projection (for Wednesday’s average price per gallon): UP $0.01

The Dow Jones Industrial Average rose over 500 points today, helping to pull up crude and heating oil prices, which rose 5% and 3%, respectively.  An EIA report released today showed that “demand destruction is still occurring,” said Tradition Energy analyst Gene McGillian, quoted on CNBC.com.  But a lower-than-expected increase in US crude inventories and the announcement of plans for another OPEC meeting on November 29th stimulated enough confidence to bring about an up day for crude and heating oil.

HEAT USA price experts noted another day of steep ups and downs for oil prices, and expected a small increase in retail prices tomorrow.

HEAT USA Price Report
Evening projection (for Friday’s average heating oil price per gallon): UP $0.04

Crude oil prices, along with stock markets around the world, plunged again today. OPEC’s announcement this morning that it will cut oil production by 1.5 million barrels a day seemed to have no affect on falling oil prices and market pessimism. The deepening global economic slowdown and impending slump in energy demand continues to be the main concern of commodity traders, and it is apparently a big enough concern to outweigh a sizeable production cut by the organization that produces 40% of the world’s oil. An article on PBS Newshour Online summarizes the situation: “”OPEC has offered the market all the ammunition they had,” Robert Laughlin, a senior broker at MF Global Ltd. in London, told Bloomberg news. “With the bearish economic outlook and manufacturing in freefall, this accord is not good enough.”

The lack of impact made by OPEC’s production cut further confirms worries that the economic slowdown would spread worldwide and demand reductions would extend to huge oil consumers like China and India. Manufacturing around the world has slowed significantly, showing that a cycle of reduced demand and reduced supply has begun, with no end in sight. An article on Bloomberg.com notes that the historic nature of the drop in oil demand: “Global oil demand may decline for the first time in 15 years in 2008 and stagnate next year, the Centre for Global Energy Studies said in a report on Oct. 20.”

As we’ve said before on the Zone, Americans are facing significant financial hardship in the coming months. As global demand for oil continues to sink, however, Americans can take solace in dropping crude oil prices that bring lower heating oil prices along with them.

Crude and heating oil prices fell again today by almost 5%, matching another sizable drop off in the stock market. Mounting evidence that the economic turmoil in the US is spreading to world markets drove down the price of crude and drove up the value of the dollar.

As reported by MarketWatch.com, “Merrill Lynch cut its 2009 oil price forecast to $90 a barrel from $107 a barrel and warned that a ’synchronous global recession’ could bring oil prices to $50 a barrel.” HEAT USA pricing experts predicted an average price drop of $0.12 per gallon tomorrow morning.

Monday’s nosedive in the stock market and crude oil prices led to a significant decline in heating oil prices that translated to an average drop of $0.17 per gallon this morning.

However, stocks have rallied this morning and crude oil prices have followed suit, which could lead to a midday hike of the price of heating oil.  Stay with The Heat Zone for updates later today.

Heating Oil prices followed the trend of the day, declining sharply as the stock market and the price of crude oil plunged on news of the bailout bill failing to pass the House of Representatives.

HEAT USA pricing expert Mark Kohan predicted an average drop of $0.20 per gallon in wholesale prices by tomorrow.

Commodities prices fell along with the stock market in early trading on Monday.  As the details of an eleventh-hour deal on the government bailout bill for the financial sector emerged, traders seemed to doubt that the bill, if it does pass a Monday vote in Congress, would provide adequate measures to avert a forthcoming economic slowdown.  A Bloomberg.com article quoted David Moore, a commodity strategist at Commonwealth Bank of Australia in Sydney, on the state of the markets: “Even if the Troubled Asset Rescue Plan is passed, that doesn’t necessarily mean there aren’t any obstacles on the road to economic recovery.  There are worries about the outlook for the international economy.”

As of 9:30 Monday morning, crude oil had fallen over $5 from its Friday closing price and hovered around the $101 per barrel mark.  Heating oil dropped as well, down almost 5% from its Friday closing price.