Heating oil prices at highest in two years

Adding cold insult to gas pump injury, home heating oil prices shot up another 9.5 cents a gallon in the past week on Long Island to the highest in more than two years, the state reported Tuesday.

The new average at full-service dealers was $3.379 a gallon as of Monday, according to a survey by the state Energy Research and Development Authority - the highest since Oct. 20, 2008, when it was $3.426 - and falling.

Experts blamed rising crude oil prices, now near a two-year high, along with the current cold snap in Europe and the United States and rising demand worldwide - especially in China - for diesel fuel, which is nearly identical in composition to heating oil.Ron Williams, a retired engineer, said it isn't just gas prices that have him scaling back this holiday season. A spike in home fuel oil prices is also costing him. His remedy: "More sweaters." "I'm living on my pension," said the 69-year-old resident of East Northport. "We're going to have to use wood."

And industry analysts contacted Tuesday warned Long Islanders should expect more to come. "I think heating oil prices will continue moving up," said Andy Lipow, president of Houston consulting company Lipow Oil Associates Llc.

The Long Island average for heating oil in the state survey has been as high as $4.93, but that was in July 2008. This year the price of the fuel most Long Islanders use to warm their homes has risen by 40 cents a gallon since Aug. 16, when the average was $2.979.

Kevin Rooney, chief executive of the Oil Heat Institute of Long Island, a trade group of retailers, says his members are getting complaints from customers. They're also frustrated because the overwhelming reason for the increases is investment dollars flowing into commodities - artificially raising crude's price beyond the supply-and-demand reality.

"We have more crude oil and more refined product than you can shake a stick at," he said. "There are more than enough supplies to cover this cold snap, even if it went on for the next two or three weeks."

For Long Islanders, the heating oil price increase compounds the pain they're feeling at gas pumps. Don McVeigh, 62, of East Northport, said at an East Northport gas station Tuesday that both are compounding his efforts to make ends meet. He's unemployed and must travel to and from job interviews. "We've cut back a bit," he said.