Heating oil, gasoline prices remain high

Heating oil rose by another 2.7 cents on Long Island in the week ended Monday, to an average of $3.641, the highest in more than two years, as cold weather kept demand strong.

At least one analyst, citing short-range forecasts for continued harsh weather, thinks that it will be several more weeks before heating oil prices begin to ease, as they normally do midway through winter, but that gasoline prices could recede in coming weeks.

Gasoline was stable in the past week, with regular averaging $3.402 a gallon Thursday, the AAA said - a fraction of a cent more than a week earlier. But that also was the highest in about two years. Despite that, the federal government said Wednesday that demand nationally for gasoline was stronger last week than a year earlier, at 8.63 million barrels a day.

Crude oil, the chief ingredient in gasoline and heating oil, has fallen from a recent high of about $93 to close Thursday at $85.64 a barrel on the New York Mercantile Exchange. Futures prices for gasoline, heating oil and natural gas also fell - the last based on a government report Wednesday showing strong supplies.

Petroleum analyst Stephen Schork, editor of The Schork Report published in Villanova, Pa., attributed the crude price decline to statements over the weekend by Saudi Arabia's oil minister that the OPEC cartel considered oil too expensive at $95 to $100 a barrel and might take steps to increase supply; and to investors dumping oil futures contracts in response to weakening prices.

Schork says gasoline prices could slip in the short term but will likely begin their seasonal increase as winter ends, driving increases and more expensive-to-produce summer gasoline reaches local pumps. He thinks heating oil will remain expensive a while longer.

The average price for the fuel that most Long Islanders use to heat their homes has risen by more than 66 cents a gallon since its recent low in mid-August in the state survey.

Heating oil on Long Island ranged during the last heating season from an average of $2.698 in the state survey in September 2009 to $3.158 in January 2010 - from full-service dealers.

Irvine, Calif.-based Kelley Blue Book said earlier this week that the weak economy and rising gas prices are making new and used car shoppers rethink their selection criteria in favor of smaller vehicles with fewer cylinders - based on a survey earlier this month of more than 1,100 people in the market for vehicles. Kelley said 43 percent were delaying purchases and also had cut back on vacation plans, eating out and shopping trips.