Long Island heating oil prices have risen nearly 5 percent in three weeks as the temperatures have dropped, energy and weather experts said, and there's more of both to come.
The chill and rising price of crude oil have pushed heating oil prices up by 14.5 cents a gallon since Dec. 14 and they could rise by 10 to 15 cents a gallon in coming weeks, by some estimates, unless crude oil prices drop or the weather warms up.
Heating oil at full service dealers on Long Island averaged $3.056 a gallon on Monday, up nearly 5 percent or 14.5 cents from Dec. 14 and up 32.8 cents or 12 percent from a year earlier, according to the state Energy Research and Development Authority. That's the highest retail average here in more than a year.
The increases are similar to those throughout the heating oil dependent Northeast in recent weeks due to the cold weather.
Laurey Shinick, 45, of East Northport, said the higher price means cutting back on nonessential expenses. From October to December, she said she has paid about $1,600 for oil, double the amount a year earlier, in part because her household is using more oil this year. While Shinick likes to keep the thermostat at 73 degrees, her uncle, who is 82, constantly feels cold and turns the dial to 80 degrees, she said. "It means no play money, cutting back on going out for lunch or even taking the baby to the children's museum," she said.
There's better news for homeowners who heat with gas. National Grid said that it expects its average residential customer to pay 12.5 percent less this winter than last, or the equivalent of heating oil at $2.13 a gallon.
Heating oil, which 65 percent of Long Islanders use to warm their homes, has averaged as high as $4.93 a gallon on Long Island in that survey but that was on July 13, 2008, not during a cold spell. Since then, the Long Island average has been as low as $2.515, on March 16.
The bitter cold has made homeowners nervous about running low, said Shinick's oil supplier, Rich Lewisy, a manager at Lewisy Fuel Oil Inc. in East Northport.
"Any time you get this kind of cold weather, especially snow and extremely cold weather, people get nervous and start calling ahead," Lewisy said.
Although supplies of heating oil nationally are adequate - higher than last year, in fact, based on the latest government figures - the brutal cold in recent weeks has pushed prices upward at wholesale terminals, a sort of supply chokepoint, said Charles Wesley, an energy analyst for the state authority. "If you're an oil dealer, because of high demand right now there's a lot of competition for that oil," he said. "That extra cost has to be passed along at some point."
Rich Larkin, president of Hedge Solutions, a consultant to oil retailers, said despite the strong inventories, the anticipation of higher demand and tighter supplies has pushed up futures prices and wholesale and retail prices. "There's plenty of inventory right now but it's the expectation that things could get a little tighter," he said.
Crude oil, meanwhile, has more than doubled in price from last year - to a close Tuesday of $81.77 on the New York Mercantile Exchange, the highest in 14 months. It was about $70 only a month ago.
Reasons for that include signs of a global economic recovery, which will increase future demand for energy; and a diversion of many investor dollars from stocks into safer investments in commodities such as gold and petroleum. And most recently, the cold. "That's the big driver," said Andy Lipow, president of Houston consulting company Lipow Oil Associates Llc.