Oil and Gas

US Retail Heating Oil Hits Record $3.85 Per Gallon

By Reuters

The average price U.S. consumers paid for heating oil rose 17.5 cents over the last week to a record $3.85 per gallon, the government said Wednesday.

Heating Oil Delivery Truck

The national heating oil price was up $1.36 from a year ago, the U.S. Energy Information Administration said in its weekly survey of heating fuel costs around the country.

U.S. fuel dealers asked the Bush administration on Wednesday to release emergency heating oil supplies held by the government to ease prices.

Heating oil prices are rising because of expensive crude oil, which hit a record high of $111.80 a barrel this week. The price of crude accounts for about two-thirds of the cost for making heating oil.

"High crude oil prices have been an important factor underlying high petroleum product prices this season, including residential heating oil," the EIA said in its weekly review of the oil market.

In addition to crude costs, the agency said tight heating oil supplies have also helped to push up prices.

"Inventories, particularly in New England and the Middle Atlantic regions, remain at relatively low levels, reflecting the strong global market for distillate fuels," the EIA said.

Total U.S. heating oil stocks stood at 26.9 million barrels at the end of last week, down 3.2 million barrels from the week before and 14 million barrels less than a year ago, according to EIA, the statistical arm of the Department of Energy.

Consumers generally should soon see a break in heating oil prices as spring begins this week and warmer weather starts arriving. However, the EIA said the U.S. Northeast, which is the world's largest heating oil market, normally has strong heating fuel demand through April, "keeping pressure on markets for a bit longer."

In its new survey, the agency said Washington D.C. again had the most expensive heating oil at $4.16 a gallon, up 10.3 cents from the previous week. The next-highest prices were in New Jersey at $3.97, Connecticut at $3.96 and New York at $3.94.

The lowest price for heating oil was in Nebraska at $3.55 a gallon, up 12.8 cents, followed by Iowa and North Carolina at $3.64 each and Kentucky at $3.65.