US supply of heating oil appears adequate, barring tough winter
A severe winter could cause a sharp increase in heating-oil prices, but supplies generally should be adequate, oil industry analyst Dan Lundberg said Sunday.
The price of heating oil, or distillate No. 2, has already risen 0.75 of a cent in the past four weeks, and some price increases are ''a virtual foregone conclusion,'' Mr. Lundberg said.
The size of the heating-oil price boosts depends on the severity of the winter, he said. If it's not severe, ''there will be plenty of supply and little chance of (bigger) price increases.'' He added that ''our reserve refining capability is very comfortable. In spite of having increased consumption this summer, there is more than sufficient supply,'' he said.
An article in Monday's Wall Street Journal, however, said distillate inventories are 4 percent lower than at this time last year.
In New England and the Middle Atlantic states, the article pointed out, distillate stocks were down 33 percent and 16 percent, respectively, meaning consumers in those regions will be more vulnerable to a rapid price increase, should a cold snap occur.