Heating oil on LI rises 8 cents per gallon

Heating oil jumped by almost 8 cents a gallon on Long Island in the week ended Monday, mostly on tight supplies and despite weeks of mild weather.

Gasoline, however, fell again in the past week, with regular down 1.8 cents to an average of $3.689 a gallon Wednesday, AAA said. The federal government said supplies nationally are down 1 percent from last year, but MasterCard Advisors said demand is off by 4.4 percent.

The decline in local gasoline prices comes on a day when a widely watched benchmark for U.S. oil closed at more than $100 a barrel for the first time since June. West Texas Intermediate crude closed Wednesday at $102.59 a barrel on the New York Mercantile Exchange. It had been trading around $85 as recently as a month ago.

The price of West Texas Intermediate rose because of news that a glut of oil in Oklahoma would be relieved when a key pipeline reverses the direction of its flow, to bring oil from Oklahoma to the Gulf Coast, said Dominick Chirichella, senior partner at the Energy Management Institute in Manhattan, an education and publishing company that also trades energy futures.

The sharp price rise probably won't add to higher prices on Long Island, experts said. That's because heating oil and gasoline on Long Island, and much of the U.S. East Coast, are indexed to more expensive grades of oil like Brent, which is from the North Sea and has held relatively steady in price. Brent closed at $110.89 a barrel Wednesday.

Heating oil on Long Island cost $4.126 a gallon at full-service dealers Monday, the state Energy Research and Development Authority said -- the highest since April 25. The record average for heating oil on Long Island is $4.93, set in July 2008.

The U.S. Energy Department said Wednesday national inventories of the category of fuels that includes heating oil and diesel fuel were down almost 16 percent from a year ago.

Chirichella said tight supplies result largely from strong and growing demand for diesel outside the United States, especially in developing nations such as China: "That's the big driver."

The energy department forecast Oct. 12 that this heating season would be the most expensive ever for homeowners who use oil, including about two-thirds of Long Islanders.

Separately, the Obama administration proposed Wednesday doubling the fuel efficiency of U.S. autos to 54.5 miles per gallon by 2025, to ease dependence on imported fuel.

Prices on Long Island

Gallon of gasoline

$3.689 Yesterday 11-16

$3.707 Week earlier

$3.748 Month earlier

Gallon of heating oil

$4.126 Monday

$4.048 Week earlier

$3.288 Year earlier

Sources: AAA, New York State Energy Research and Development Authority