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Higher Heating Oil Costs Expected This Winter

September 4, 2008

By ELISHA SAUERS Staff writer

With winter just around the corner, home heating-oil customers are already thinking about looming energy bills and many will find the going rates for filling their furnace or boiler tanks quite chilling.

Heating oil is one of the more volatile markets of fossil fuels and is subject to drastic fluctuations in the short-term, due to speculators, weather and supply, according to the administration.

This season refinery plants are operating at 86 percent of capacity because of small profit margins. That’s 6 percent lower than the rate refiners were running at the same time in 2007. And when supplies are low, the prices tend to go sky-high.

The big picture for this season is not a bright one, as Maryland seems to be getting hit harder than many other states by the trend. For example, the retail prices for Marylanders averaged about $4.03 per gallon in the May, when prices were averaging at $3.92 across the country.

As of Aug. 26, the most recent date available, Energy Information Administration statistics show the national spot price for heating oil was $3.20 per gallon – higher than the same week last year when it was $1.95 per gallon. The spot price is the price the oil trades for and is often lower than the prices customers pay.

Cost-conscious customers are feeling cornered by the expense this winter and are faced with an encroaching dilemma: Wait it out and hope to snag a low rate; lock in a rate early with a delivery company at the risk of being undersold down the road; invest thousands of dollars in a new electric or natural gas heat system, though both also are seeing increases this year; or lower their furnace-heat consumption and stock up on accessory heat sources, such as firewood and small electric, propane or kerosene space heaters.

To many who are desperate for savings, {Corrections:} {Status:}

IN VOLATILE MARKET, PRICE ALREADY AVERAGING $4 PER GALLON

(c) 2008 Capital (Annapolis). Provided by ProQuest LLC. All rights Reserved.




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