Heating oil futures rose the most in almost three weeks as reports today and yesterday indicated the U.S. housing market may be firming and fuel demand may improve.
Futures gained as much as 1.2 percent as the S&P/Case- Shiller index of property values in 20 cities showed residential real estate prices fell in April at the slowest pace in more than a year. A Commerce Department report yesterday showed demand for new U.S. homes rose in May as mortgage rates dropped.
“The U.S. housing market is showing some sign of life and with the market being oversold, that is giving us a bounce,” said Phil Flynn, senior market analyst at Price Futures Group in Chicago.
Heating oil for July delivery rose 2.52 cents, or 1 percent, to $2.5637 a gallon at 9:41 a.m. on the New York Mercantile Exchange, after touching $2.5677. Prices have fallen 5.3 percent this month and have lost 13 percent this year.
The S&P/Case-Shiller index dropped 1.9 percent in April from the same month in 2011, the smallest decline since November 2010.
May new home purchases climbed to a 369,000 annual rate, the most since April 2010 and up 7.6 percent from the prior month.
July-delivery gasoline gained 0.55 cent to $2.6513 a gallon. The premium to the August contract narrowed 1.47 cents to 13.29 cents a gallon. The front-month contract has dropped 6.1 percent in June and is down 1.3 percent this year.
Regular gasoline at the pump, averaged nationwide, fell 1.4 cents to $3.397 a gallon yesterday, according to AAA. It was the lowest level since Jan. 26.
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