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WIRE:01/21/2000 16:30:00 ET

Heat oil groups call for U.S. oil reserves release

NEW YORK (Reuters) - Retail trade groups in the U.S. Northeast, the world's largest heating oil market, said Friday they wanted the Clinton administration to release oil from the U.S. Strategic Petroleum Reserve (SPR) immediately, to temper skyrocketing winter fuel prices. "We want to get the SPR released as soon as possible...to stop the hype in prices," John Maniscalco, executive vice president of New York Oil Heating Association (NYOHA), told Reuters.

The NYOHA has joined its counterparts in the rest of New York State, New Jersey and Connecticut in agreeing to approach their elected officials to step in, Maniscalco said.

Wholesale heating oil prices for barges in New York hit a record all time high of $1.10 to $1.37 per gallon on Friday, overtaking the last record high during the Gulf crisis in 1990-91, according to the Journal of Commerce, a business paper widely used by heating oil retailers.

Prices have surged from a range of 79-80 cents just a week ago, and are more than double their year-ago levels of 40-48 cents, it said.

Higher prices last November prompted the NYOHA to contactSenator Charles Schumer, a New York Democrat, with their concerns, Maniscalco said. He said heating oil associations buffer the hikes in wholesale prices and only pass on around half of the increases to consumers.

But U.S. politicians, also concerned that the extremely high prices of crude may have a negative effect on the U.S. economy, have already been urging Washington to sell oil from the 567-million-barrel SPR.

Senator Schumer warned earlier this week that the high prices could drive up U.S. inflation and called for sales of U.S. reserves of crude. Another senator, Maine Republican Susan Collins, backed the SPR sales as a way to counter the international oil cartel, the Organization of Petroleum Exporting Countries (OPEC).

The recent sharp heating oil hikes were mainly spurred by the drop in temperatures in the Northeast last week, which plunged below normal. Temperatures were expected to remain an average of 8-12 degrees Fahrenheit below normal until the end of next week, said Jon Davis, a widely-watched meteorologist at Salomon Smith Barney.

The market drew more fuel this week from bullish stocks reports showing big draws in U.S. heating oil stocks last week.

But heating oil prices were already on the rebound from a record low last spring, after key oil producers agreed to cut worldwide production.

Although U.S. Energy Secretary Bill Richardson has expressed concerns about rising crude oil prices, U.S. policy was not to meddle with markets, the Department of Energy said.

"We're not going to take any steps to make corrections," Richardson said earlier in January.

But both Schumer and Collins have said they will push for legislation giving the president authority to sell crude from the SPR. The U.S. Congress reconvenes on Monday.

Although NYOHA's Maniscalco said he thought the release of the SPR would take of pressure on prices, he pointed out that there was no need for consumers to panic about supplies of heating oil.

"The wholesalers are meeting their (supply) contracts. There is no run on home heating oil," he said.

-- snooze button (alarmclock_2000@yahoo.com), January 21, 2000

Answers

Did any of these idiots find out how long it would take oil that was released from the reserve to find it's way to the NE as heating oil?

No?

I thought not.

Did any of them stop to consider that we might need to oil in event of a national emergency? That that's why it's there?

I thought not.

Did any of them ask if the oil were clean or dirty, and if dirty, what the added cost would be of refining it.......of course they didn't.

-- (4@5.6), January 21, 2000.

But they would only release the oil in case of national emergency or Y2K...and it clearly isn't Y2K related...

-- Mad Monk (madmonk@hawaiian.net), January 21, 2000.

When was the last time the gov't O.K.'d a release of these strategic oil reserves. Is this a common occurance? -L.

-- Lucy (windsng@...com), January 21, 2000.

This is just political posturing so the sheeple will feel that somebody is doing something. We have discussed the many pitfalls of the SPR in this forum and they still hold true in regards to this particular news item.

Nothing has changed. SPR is not the answer.

-- Irving (irvingf@myremarq.com), January 21, 2000.

1) Granted that the SPR is a bit more difficult to refine. OK So what?

2) Gee the prices are rising. SO?? this is NOT a STRATEGIC problem.

3) WHAT THE F@#K are they gonna do when the SPR is completely drawn down to "Maintain prices" or was the quote "Take the hype out of prices" and we need to fuel a couple warships, a few warplanes and some armor to do some REAL work (OH sorry with BJC we don't have that to worry about they'll never have to work).

DAMN it's called the STRATEGIC PETROLEUM RESERVE for a REASON!!!!!!

These idiots are SO SHORTSIGHTED IT'S GONNA DRIVE some of us NUTS!!!

(Unless, of course, the GOAL is to have the US at a SEVERE disadvantage....... Nah that COULDN'T be it...........

ummmmmmmm Who is King here today????)

-- Chuck, a night driver (rienzoo@en.com), January 22, 2000.

What Chuck said.

-- Andy (2000EOD@prodigy.net), January 22, 2000.