Consumers to feel winter's bite more from weather than heating oil prices
U.S. consumers in the last year or so have been whipsawed by the price of oil. Having seen crude oil prices surge to more than $147 a barrel in July 2008, prices tumbled steadily right into the new year, only to resume a steady climb on investor speculation that the world economy was heading out of recession. After falling to around $30 a barrel last winter, U.S. crude oil prices more than doubled to about $70 a barrel by June.In recent weeks, however, prices have once again begun to fall as investors reassess whether the economy is indeed on the rebound. On Friday, the price of a barrel of sweet crude, the kind favored by the United States, rose slightly to $66.20. But for the week, crude prices retrenched more than eight percent, the biggest weekly loss in more than two months.
With all that volatility, consumers likely are wondering where oil prices are heading next, especially with predictions of a cold, snowy winter in some parts of the country. First the bad news: a bitter cold winter would likely result in higher home heating-oil prices than those at current levels, but nothing on the order seen last year, according to Daron Bertillion, an analyst with Mobius Risk Group, a Houston-based commodity and energy advisory firm.
On Tuesday, data from the American Petroleum Institute showed a sharp rise in crude oil inventories, rising 2.855 million barrels in the week ending Sept. 18 and countering analyst expectations of a decrease in inventories.
High crude inventories and excess capacity will likely mute any bull run in crude prices in the next few months, Bertillion said, meaning there's little likelihood that consumers will soon see $4-a-gallon gasoline.
Also weighing on oil prices is the recent run-up in stock prices. Blue-chip stocks have gained nearly 25 percent in value since late March, when the Dow Jones industrial average hovered around 7,500. On Friday, the Dow closed at 9,665.19. That climb will likely lead some investors to do some profit taking, which likely will have the effect of keeping oil prices in check, he said.
In coming weeks, crude oil prices could tumble another $7 to $10 dollars a barrel to as low as $56 a barrel, Bertillion said. That will likely result in lower prices for gasoline, diesel fuel and home-heating oil in the next few months.
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Reader Comments (Page 1 of 5)
9-26-2009 @ 11:10AM
welshwlsh said...
Oil is going up! Thanks to Iran and her dreams of destroying Isreal.
Reply
9-29-2009 @ 9:21PM
TF said...
Remember that Iran is only enriching uranium to make electricity. Those missles that they are testing is to send the electricity to remote locations where wiring is impractical.
9-30-2009 @ 6:27AM
Barbara said...
If you cannot spell the name of a country just do not write about it.
9-26-2009 @ 11:30AM
justlegalizeit09 said...
ha!!! by the time winter comes around, oil will be back up.... it only fell a few bucks.... the oil companies will cash in on the fact that people need oil! some need oil to heat their homes..... it will go up just in time for the winter and they will blame it on some stupid crap....
Reply
9-26-2009 @ 6:53PM
lillylan said...
I agree with you, they'll think of something by the time heating oil is needed. Its the same every year!
9-27-2009 @ 8:16AM
KNUTE9 said...
Oil is up over 40% since last year....which is bad news to the greater economy.
9-27-2009 @ 5:35PM
Don said...
I just saw on the news of an oil refinery fire, There is this years excuse to raise prices. Your 100% right
9-26-2009 @ 11:45AM
rb said...
Oil prices down? Why aren't gasoline prices down? Just the continued rip off of the American consumer by big oil. The government won't do anything about it, because all of the politicians are heavily invested in petroleum and reaping huge profits.
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9-26-2009 @ 11:52AM
hunner said...
I don't know where you're buyin gas, but in Florida, we've seen the price go down about 10% in the last month or so. Today I paid $2.41 and in August I paid close to $2.70.
9-29-2009 @ 6:08PM
Crystal said...
We live in Washington and gasoline prices are over $2.90 a gallon...I would love to be back in Florida or Arizona...
9-26-2009 @ 12:01PM
ed said...
ha!!! by the time winter comes around, oil will be back up.... it only fell a few bucks.... the oil companies will cash in on the fact that people need oil! some need oil to heat their homes..... it will go up just in time for the winter and they will blame it on some stupid crap....
....yeah like a thunderstorm in the Gulf.
Reply
9-26-2009 @ 12:30PM
Mark Borg said...
NATURAL GAS COULD BE A PENNY PER TRUCKLOAD AND MY BILLS WILL STILL BE $200 PER MONTH . OUR GAS COMPANY PROBABLY DONATES TO SENATOR S TO KEEP THEIR PRICES " LEGAL "
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9-26-2009 @ 12:58PM
Jay Wood said...
RB, you are right on the money! Oil prices, gas prices, heating prices, whatever the big money guys know we have to use. Those 'commodities' are going to be speculated up whenever the need might be apparent. Don't take it to personally, as long as our society is based on how much money there is to be made, people are going to do so. Like so many lemmings...
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9-26-2009 @ 1:50PM
jack said...
If you use oil to heat your home, fill up now. Save a few dollars. If the rush happens now, when winter rolls around, prices will be the same.
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9-26-2009 @ 1:57PM
simone said...
This might all be temporary with "CAP and Trade looming in the horizons.....Brace yourselves.....above all blame Al Gore
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9-26-2009 @ 2:12PM
NOENERGYFUTURES said...
2.39/GALLON IN VA...SHOULD BE 1.29/GALLON AT THE MOST...THANK FORMER SENATOR PHIL GRAM (REPUKE) OF TEXAS FOR PUSHING THE BILL THROUGH CONGRESS TO ALLOW CRUDE FUTURES TO BE TRADED TO DEATH...SIGNED INTO LAW IN THE LAST FEW DAYS OF BILL CLINTON IN THE WHITEHOUSE DURING REPUBLICAN CONTROL OF CONGRESS WHO DEREGULATED BANKS AND WALL STREET AND BIG OIL...WHEN WILL IT CHANGE???
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9-27-2009 @ 5:57PM
Jon Frederick Council said...
It won't. I'm sorry to break that to you, but a study of our history beyond the fairy tale school house version shows the same proclivity of the government of both parties practicing "politics of division" while they continue behind the scenes to craft legislation. Legislation which results in wealth leaving the hands of the masses, to go into the hands of the few. The big corporate interests, who then in turn, throw some of that money back to the politicians in campaign contributions, and perks for those leaving public office. (Lobbyists, advisors, speakers, even management positons for far more money than public office could ever pay.
9-28-2009 @ 7:32AM
john brooks said...
2.80 a gallon here in upstate ny 40 miles away from here it is 2.50 figure that one out
9-26-2009 @ 2:19PM
RAY said...
Another rise to $4.00 a gallon in the near future or so means another recession. Greed will never cease.
Reply
9-26-2009 @ 3:51PM
Dale said...
My daddy always told me "Don't count your chickens until they hatch". If Israel decides to take out Iran's nucs - gasoline might go to $10 per gal.
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