Bloomberg News

Heating Oil Gains After Jobless Claims Drop to Three-Year Low

December 16, 2011

Dec. 15 (Bloomberg) -- Heating oil and gasoline rose on indications the U.S. economy is strengthening after jobless claims slid last week to a three-year low and New York regional manufacturing expanded to the highest level in seven months.

Futures advanced after the Labor Department reported that applications for unemployment benefits fell by 19,000 to 366,000, the fewest since May 2008. The Federal Reserve Bank of New York’s general economic index rose to 9.5, from 0.6 in November. Equities gained and the dollar weakened, increasing commodities’ investment appeal.

“We’re up because of equities and the weak dollar and some good jobs numbers,” said Chris Dillman, an analyst and broker at Tradition Energy in Stamford, Connecticut. “Empire State manufacturing was also good.”

January-delivery heating oil increased 1.77 cents, or 0.6 percent, to $2.8476 a gallon at 11:15 a.m. on the New York Mercantile Exchange, after sinking 3.4 percent yesterday to the lowest level since Oct. 5. Prices are up 12 percent this year.

Gasoline for January delivery rose 0.78 cent, or 0.3 percent, to $2.5115 a gallon on the exchange, after sliding 4.6 percent yesterday. Prices have gained 2.4 percent in 2011.

“Domestic signs of economic improvements are helping refined products and the winter heating season is starting in a week,” said Peter Beutel, president of trading advisory company Cameron Hanover Inc. in New Canaan, Connecticut.

Jobless Claims

Initial jobless claims reflect weekly firings and tend to fall as job growth -- measured by the monthly non-farm payrolls report -- accelerates. The four-week moving average, a less volatile measure than the weekly figures, dropped to 387,750 last week from 394,250.

A separate Labor Department report showed the producer price index increased 0.3 percent last month after declining 0.3 percent in October.

Futures pared gains after the euro and stocks retreated and Federal Reserve figures showed industrial production fell in November for the first time in seven months, indicating a pause in manufacturing as 2011 nears a close. Output at factories, mines and utilities declined 0.2 percent after a 0.7 percent gain in October.

The euro was up 0.1 percent against the dollar to $1.299 at 11:15 a.m. today in New York after strengthening more than 0.5 percent. The Standard & Poor’s 500 index of stocks rose 0.5 percent, after climbing as much as 1.1 percent earlier.

Regular gasoline at the pump, averaged nationwide, fell 0.5 cent to $3.259 a gallon yesterday, according to AAA data.

--With assistance from Bob Willis, Alex Kowalski and Timothy R. Homan in Washington. Editors: David Marino, Charlotte Porter

To contact the reporter on this story: Barbara J Powell in Dallas at bpowell4@bloomberg.net

To contact the editor responsible for this story: Dan Stets at dstets@bloomberg.net


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