Pre-buy prices for oil reflect market jitters
Published: Monday, May. 30, 2005
CONCORD (AP) – With crude oil prices showing no signs of relenting, heating oil companies have set pre-buy prices at all-time highs.
And customers who are considering gambling on a market downturn need only look at last year, when oil prices climbed skyward for the entire summer.
An increase of 50 cents per gallon means a typical homeowner will pay between $400 and $500 more.
“A lot of people maybe want to hold off because the price is so high,” said Aaron Christenson, an account manager with J.B. Vaillancourt in Hillsboro. “The only thing I know here is I don’t know what’s going to happen. (But) my guess is this market’s going north.”
Christenson said J.B. Vaillancourt is offering a pre-buy price of $1.999 per gallon, up from $1.449 per gallon last year. At Rumford Energy, the pre-buy price is $1.849 per gallon, compared to $1.339 last year. Johnson & Dix customers have received pre-buy offers at $2.03 a gallon.
Less than a decade ago, prices were between 70 and 80 cents, according to the state Office of Energy and Planning. Crude oil prices have increased 44 percent in the past year, from $36.69 per barrel last April to $52.89 per barrel this year, according to the research group Energy Security Analysis Inc.
Driving up the price are increased demand in China, tension in the Middle East and a shortening of the reserve supply.
“There’s no way anyone can predict what the market’s going to do,” said John Garside, president of the Oil Heat Council of New Hampshire. “All you have to do is burp in the Middle East and the price goes up.”
That matters in New Hampshire and the rest of the region. The Northeast consumes about 80 percent of the heating oil in the country, according to Joseph Broyles, an energy program manager at the Office of Energy and Planning, and heating oil warms most of the homes here.
“For over half the people in the state, the primary heating is heating oil. It’s not like the Midwest where primary heating is propane or natural gas,” he said. |
