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Friday January 21, 3:16 pm Eastern Time

NY heating oil wholesale barges hit all time record

NEW YORK, Jan 21 (Reuters) - Wholesale heating oil prices for barges in New York hit a record all time high of $1.10 to $1.37 per gallon on Friday, according to the Journal of Commerce.

The new price, effective on January 21, overtook the last record high of $1.06 to $1.08 on October 10, 1990 during the Gulf War, said the business paper, which tracks the wholesale prices on a daily basis and is widely used by heating oil retailers.

Prices have surged from a range of 79 to 80 cents just a week ago, and have almost doubled from a year ago when they were at 40 to 48 cents, it said.

The hikes were mainly spurred by below-normal temperatures in the Northeast last week that were expected to remain an average of 6-9 degrees Fahrenheit below normal until February 1, according to Pennsylvania's Strategic Weather Services.

-- snooze button (alarmclock_2000@yahoo.com), January 21, 2000

Answers

It amazes me; as an industry outsider, that oil and these other oil related products have stayed literally in a very close pricing range since 1990!! When I see prices going up 10 cents or 35 cents and everyone hitting the wall it just seems incredible; as that is not that much money. How has this industry kept the price of oil so low for so long anyway; especially since we have had closet inflation for so long? -L.

-- Lucy (windsng@...com), January 21, 2000.

Lucy, petroleum and chemical products are in everything we use, a small increase in price equals a huge dependency that must be paid.

Maybe someone can give a better answer. That's the best I can do for now.

-- snooze button (alarmclock_2000@yahoo.com), January 21, 2000.

Lucy, snooze button was right on. If petro products go up, our entire economy is jepordized.....plastics, jet fuel, diesel for over the raod trucks and trains, you name it, the price goes up. This is just the leading edge of a nightmare.

There have been some interesting threads about links between the US -- from the time of Ronald Regan -- collaborating with Saudia Arabia to keep oil prices down for two reason. It helped us. It hurt Russia, who needed hard currency (oil is denominated in dollars) to develop their war machine. Wish I could refer you to it. The end result is that we have had low oil prices since 1974, which worked to our advantage, and the Russians supposedly collapsed.

Don't give the industry credit -- that was political, and a great use of economic warfare.

Course, now, there's a new game in Saudia Arabia, and we aren't controlling it. Plus, as also mentioned, there are a lot of people out there who would curtail their oil production for a year or two in order to see us fall. The two "I"s (Iran, Iraq) are prime examples.

Plus, there may or may not be Y2k problems in the industry.

-- rocky (rknolls@no.spam), January 21, 2000.

I think the current concern is not just PRICE but also AVAILABILITY.

Just as the pre-Y2K stockpiling was expected and did not have much impact, some may be trying to fill inventories now that real prices are moving. Dealers and distributors are caught with their inventories near record lows due to JIT economics.

-- Bill P (porterwn@one.net), January 21, 2000.

Bill makes a very good comment.

Perhaps 2% of people were "hoarding" due to y2k before the rollover. Now, maybe 5-10% are worried enough to suddenly try to stock up on reserves.

In response to the original question....having the price of oil go up $4-5 per barrel, or fuel oil up 10-35 cents is not unusual....rather, it is the rather dramatic rate of increase (all within a couple of weeks).

The funny thing is that the daily traders are likely to believe that this is a spike...but when they begin to think they are on to a trend that has some force to last, they will buy in on speculations and drive the price up technically....

-- thom gilligan (thomgill@eznet.net), January 21, 2000.