Nov. 25 (Bloomberg) -- Heating oil declined in New York amid speculation that a downgrade of the sovereign debt of Portugal and Hungary indicates slower economic recovery in Europe and less demand for the fuel.
Futures fell 1.1 percent after the debt ratings of the two European Union members were cut to junk and Italy’s borrowing costs almost doubled. The EU’s Economic and Monetary Affairs commissioner, Olli Rehn, said contagion may be spreading to the core countries.
The drop in oil products is a “continued reaction to what we see with the sovereign debt in Europe,” said Andy Lipow, president of Lipow Oil Associates LLC in Houston. “The fear is that higher interest rates will result in more austerity and greater economic headwinds.”
December-delivery heating oil dropped 3.18 cents to settle at $2.9273 a gallon on the New York Mercantile Exchange. Prices have fallen in six of the past seven sessions and declined 3.5 percent this week.
Gasoline for December delivery lost 6.88 cents, or 2.7 percent, to $2.4489 a gallon. Gasoline declined 1.2 percent this week, the sixth consecutive weekly loss.
Total gasoline imports to the East Coast rose 261,000 barrels a day to 928,000 for the week ending Nov. 18, according to the Energy Department. It’s the highest level since June 10.
Stockpiles of heating oil and diesel declined 770,000 barrels in the same period to 133 million, the lowest level since December 2008. It was the eighth consecutive decline.
Regular gasoline at the pump, averaged nationwide, fell 0.6 cent to $3.312 a gallon yesterday, the lowest average since Feb. 24, according to AAA data.
--Editors: Charlotte Porter, Bill Banker
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