Crude oil prices might be dropping, but don’t expect that to translate to lower prices for home heating oil this winter, local suppliers say.
“There’s a lot of crude oil sitting around out there, but not the refined product,” said Dave Talmage, operations manager for Glassmere Fuels in West Deer.
In its annual forecast, the U.S. Energy Information Administration predicted last month that home heating oil costs would be 20 percent higher than they were last winter, compared with a 5 percent increase in natural gas bills and 3 percent increase for electric heating. Propane was expected to remain about the same.
The Energy Information Administration revised its home-heating oil forecast this month and now predicts a lower increase of 14 percent.
Dick Morchesky, owner of Export Fuel Co. in Export, said heating oil prices can’t be correlated with the recent drop in gasoline price decreases.
“The gasoline has definitely been coming down more than heating oil has been,” he said.
“It’s a supply-and-demand thing,” Morchesky said. “Gasoline usually drops this time of year because people aren’t traveling like they do in the summer. Even though you see on the news that crude is going down, that doesn’t mean the refined or the end products are going to go down as quick.”
Morchesky said the price has remained in the area of $2.70 to $2.90 a gallon, depending on the quantity.
Talmage said the price for Glassmere customers is comparable, about $2.79 for 200 to 400 gallons delivered, which he said is the average sale per customer.
Talmage said prices are “relatively the same as last winter, maybe up a little bit.”
Morchesky noted that home heating oil prices change on a daily basis.
“We could drop five cents one day and we could recoup three cents of that if it goes up the next day,” he said.
Supplies are the biggest driver of prices, the local distributors said.
“People are using it, so you don’t have a lot stockpiled and that keeps the price steady,” Talmage said.
“(Oil companies) can only refine so much at a time,” he added. “Until they get at a comfortable level or a surplus, they are not going to lower those prices. Again, it is all supply and demand.”
Tom Yerace is a freelance writer.