Heating Oil ETF Could Move on Diesel Release Plan
After the close of U.S. markets Friday, the government announced it will release diesel fuel from the heating oil reserve for the first time on record. That news could weigh on the already embattled United States Diesel-Heating Oil Fund (NYSE: UHN) next week.
The United States Diesel-Heating Oil Fund tracks "daily changes in percentage terms of the spot price of heating oil (also known as No. 2 fuel), for delivery to the New York harbor, as measured by the changes in the price of the futures contract on heating oil traded on the NYMEX," according to the ETF's web site.
Aimed at delivering more supply to New York, New Jersey and other states affected by Hurricane Sandy, the release of diesel from the heating oil reserve could further pressure heating oil futures. Heating oil for December delivery fell almost 8.6 cents to settle just below $2.95 per gallon Friday. That pushed the contract below both the 200-day and 100-day moving averages, Reuters reported.
UHN fell below its 50- and 200-day moving averages in late October. The fund gave up 2.4 percent on below average volume Friday and has tumbled 5.3 percent in the past month. UHN had $6.77 million in assets under management as of November 1.
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