Heating oil, gasoline prices creeping up during 'crunch time'

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Winter heating bills loom as oil nears $35 Heating oil, gasoline prices creeping up during 'crunch time' By Dina Temple-Raston USA TODAY

Crude oil soared Wednesday to its highest price since the Gulf War, fueling concerns that consumers will be wrestling with astronomical energy bills this winter.

Crude oil for October delivery rose $1.07, or 3.2%, to $34.90 a barrel on the New York Mercantile Exchange, the highest closing price since November 1990, during the Persian Gulf War. The all-time high was $41.15 on Oct. 10, 1990.

As a rule, every dollar added to the price of a barrel of oil adds about 2.5 cents to the price of a gallon of any petroleum-based product, experts say. That means the $7 run-up in the price of oil since the beginning of August translates to a 17-cent increase per gallon on a host of petroleum products.

Barbara Parkhie of Potomac, Md., is one of many heating oil customers across the Northeast warily eyeing energy prices. She hasn't filled her 550-gallon heating oil tank for the winter yet in hopes prices drop before the temperature does.

''We paid about $1 a gallon last year during the worst of it,'' she says, adding that she usually needs about two tanks to make it through a cold winter. ''I'm sure we're going to have to pay more than we did last year. We still don't know how much more, that's all.''

Slim inventories have driven up the average retail price for heating oil in the Northeast this week to $1.40 to $1.50 a gallon, according to the Oil Price Information Service.

In Northern California, the wholesale price of gasoline climbed to $1.70, according to OPIS figures. That means distributors are paying as much as 50 cents more a gallon this month than last. The average price at the pump in the San Francisco area has moved above $2 a gallon for unleaded and $2.25 for premium.

''This is crunch time,'' OPIS publisher Tom Kloza says. The Organization of Petroleum Exporting Countries meets in Vienna this weekend to consider boosting production. By most indications, they will, by 500,000 barrels a day, an increase analysts say will fall short of meeting global demand.

''They would need to boost production more in the area of a million barrels a day to bring prices back under $30 a barrel,'' says James Placke, research director at Cambridge Energy Research in Washington.

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-- Martin Thompson (mthom1927@aol.com), September 07, 2000


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