Consumers left out in the cold
When the first snow falls this winter, 61-year-old Grace Murphy won't be turning on the heat in her Dorchester, Massachusetts home.
With her heating oil tank at empty, she'll be huddled around her gas oven with her husband Paul, 66, and her 88-year old mother. "I don't buy heating oil because I can't afford to," Murphy said.
As crude oil futures hover just a few dollars shy of $100 a barrel, heating oil prices have set records almost daily during the last week.
Heating oil futures prices in New York, an indication of wholesale prices, climbed to a record over $2.62 a gallon this week, up 50 percent from a year ago. The speed of the increase has taken many people by surprise.
Only 7 percent of US households use heating oil, also known as "red diesel", to heat their homes, but in the cold Northeastern states about 32 percent of households do. Maine has the highest usage with about 80 percent.
It will cost an average of $1,879 to heat a Northeast home for the season, compared with $1,201 for natural gas.
In Murphy's case, spending on heating oil will mean cutting back on medical expenses, and trimming her food budget.
Heating oil wholesalers and distributors blame excessive speculation by hedge funds and traders for year-round high prices of heating oil.
But even if the winter is 10 percent warmer than forecast, those using heating oil will still end up paying about 10 percent more than last year, according to the Energy Department.
For her part, Murphy said she has stopped trying to figure out what the forecasts and soaring prices mean for her.
"I just give up," she said.
Agencies
(China Daily 11/08/2007 page16)
