OPIS: Oil Price Shock Hits Planes, Trains, Trucks, and Homeowners

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Oil Price Shock Hits Planes, Trains, Trucks, and Homeowners

Source: PRNewswire PRESS RELEASE Publication date: Feb 04, 2000

LAKEWOOD, N.J., Feb. 4 /PRNewswire/ -- Retail prices for fuel in many U.S. states have smashed through all time records and local supply shortages could prompt more increases before conditions moderate, according to Oil Price Information Service (OPIS). The Lakewood, New Jersey based publication reports that some northeastern states have seen diesel, heating oil, and jet fuel replacement costs soar by an additional 20-50cts gal in the last 48 hours.

The latest increases follow a series of price hikes that have been spurred by Winter fuels' demand that has ravaged northeastern U.S. stocks of heating oil, diesel, jet fuel, and kerosene. Widespread product outages have been reported at terminals from Georgia north to New England this week, with ports such as New Haven, Providence, and others occasionally running out of fuel altogether.

At midday, Friday, the wholesale price of heating oil, diesel fuel, and kerosene in New York Harbor -- the major supply point for the region -- had soared to nearly $1.75 gal. These prices were more than $1.00 gal higher than they stood on January 14, 2000 just before brutal Winter weather descended on the region.

Homeowners in the northeast who get deliveries of heating oil can expect to pay over $2.00 gal in some cases over the next ten days. Diesel prices in New England, New York, N.J. and Pennsylvania have soared to an average of over $1.90 gal, according to the OPIS Retail Division. Dozens of truckstops and fueling stations from Maryland north are now charging as much as $2.29 gal for diesel fuel at the pump. OPIS today predicted that the worst of the wholesale increases for the northeast should be over by early next week. But OPIS analysts warned that retail prices have yet to catch up to the higher replacement costs, and more "sticker shock" could be in the cards for fuel buyers.

"Most fuel oil dealers, retail stations, and truckstops have yet to pass on the increases," noted OPIS chief oil analyst Tom Kloza. "A lot of people are going to be paying $2.00 gal or more for some of their February fuel needs."

The increases have blindsided many large commercial fleets and end- users who had become accustomed to low fuel costs in the last eight years. Many airlines, for example, are paying more than four times as much for their jet fuel than they paid a year ago. The nationwide average price for diesel moved above $1.50 gal in the last week, and appears headed higher as other regions cope with product tightness brought about by Winter oil demand.

OPIS expects that the chaotic pricing will lead to a change in the way that many companies buy their fuel. Relatively few firms have utilized oil futures, options, and various financial derivatives contracts that could have guarded against some of the budget-beating price spikes. Those companies, including suppliers, marketers, trucking companies, airlines, and large end users, are now scrambling to find ways to manage their risk as they approach an unpredictable and unstable future.

With more wild price moves expected, OPIS is providing these companies with more information on how to protect their business from volatile petroleum price swings at http://www.opisnet.com.

OPIS Energy Group analyzes oil prices and trends for the petroleum and transportation industries throughout North America. The company tracks wholesale and retail prices for gasoline and diesel fuel, crude oil, refined products, feedstocks, and LP-Gas. This year alone, more than 100 billion gallons of fuel will be purchased pegged to the OPIS Price Index.

SOURCE Oil Price Information Service Publication date: Feb 04, 2000 ) 2000, NewsReal, Inc.

Link:

http://beta.newsreal.com/cgi-bin/NewsService?osform_template=pages/newsrealStory&ID=newsreal&storypath=News/Story_2000_02_04.NRdb@2@18@3@58&path=News/Category.NRdb@2@7

-- Carl Jenkins (Somewherepress@aol.com), February 05, 2000

Answers

I read the entire article looking for an explanation for the increases and this was all I could find.

The latest increases follow a series of price hikes that have been spurred by Winter fuels' demand that has ravaged northeastern U.S. stocks of heating oil, diesel, jet fuel, and kerosene

Does this mean that New England has never had winter before and that's why they don't know how to prepare for it?

-- Guy Daley (guydaley@bwn.net), February 05, 2000.


I know I am not dreaming this: In years past when a situation like this arose it would either be the top story on the nightly 'newsless' shows or at least mentioned. Oh, I forgot that is before the advent of Elian.

-- Kyle (fordtbonly@aol.com), February 05, 2000.

Kyle, how can you be so cold hearted! we have a Cuban boy crisis on are hands and with the primaries in full swing the press is busy electing our next dictator. You can't expect them to report on a petty little thing like a 100% increase in fuel prices.

Search

-- Search (search@answersforElian.net), February 06, 2000.


Does this mean that New England has never had winter before and that's why they don't know how to prepare for it?

What I love is the reporters who complain about global _warming_ in one story while in the next story they mumble about the _cold winter_ causing oil price hikes.

They can't get their stupid lies straight!

-- cgbg jr (cgbgjr@webtv.net), February 06, 2000.


Sadly it's all true. We here in Maine have traditionally donned our bathing suits in mid-February and thus have sallied forth to deadhead our roses. The very idea of having to heat our homes at this time of year has been a shock, I tell you, a shock. Jan in Maine (with 8 cords of wood nicely stacked in the backyard)

-- Jan Cunningham (janhame@midcoast.com), February 06, 2000.


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