Tuesday, October 17, 2000

Oil supplies remain static By Deborah Turcotte Seavey, Of the NEWS Staff

BANGOR  Heating oil supplies shouldnt be affected by recent turmoil in the Middle East, but what will happen to the price per gallon remains speculative, according to oil dealers.

At this point, its kind of a wait and see, said Scott Kimball, president of Hamel Fuels of Bangor. The Saudis said its not going to have an impact on supplies. I guess Im not pacing the floor worried about the supply. Weve got our ducks in a row.

Thats what the majority of retail and wholesale heating oil dealers have done  contacted their suppliers to ensure that the inventories they need for this winter will be available, said Wayne Mitchell, a spokesman for the Maine Oil Dealers Association.

We have to go with the information given to us by the dealers, Mitchell said. Based on the information weve received, there is nothing to indicate theres going to be a problem.

On Monday, Gulf oil producers sought to reassure consumers that oil supplies will not be disrupted, despite last weeks violent events in the Middle East and the abrupt 11 percent spike in crude oil prices.

Attending a weekend oil exhibition in Abu Dhabi, ministers from Saudi Arabia, Kuwait, Qatar and the United Arab Emirates  whose countries provide about half of OPECs current supply to the market  attributed Thursdays 11 percent oil price surge to traders and consumers fears of supplies being delayed or cut, and not to any real actions.

There is no justification for this panic, said Saudi Arabias oil minister, Ali Naimi.

The panic, however, did hurt prices in Maine, said Chris Brown, a spokesman for MaineOil.com, a Web site that daily lists prices charged for heating oil, kerosene and propane by about 300 dealers throughout the state.

Some dealers raised their prices Friday in anticipation of an expected increase in wholesale prices on Saturday. But wholesale heating oil prices dropped 6 cents Saturday, and the dealers had to make price adjustments.

On Friday, the day after the USS Cole was bombed in Yemen, the statewide average high price for heating oil was $1.619 per gallon. By Monday, with the drop in wholesale prices, the statewide average high price dropped 3 cents to $1.589.

Some people jumped the gun, Brown said about price increases that happened Friday. The high end, though, has corrected itself.

The high end is the highest average price per gallon statewide. Besides listing what each dealer is charging, MaineOil.com gives the highest price, an average price and the lowest price in each region and statewide.

However, all statewide prices  high-end to low-end  were increasing because of market conditions last week, regardless of what occurred Friday and Saturday, Brown said. Overall, wholesale prices increased 10-13 percent last week, he said.

That brought up the statewide average price per gallon on Monday because smaller dealers, who generally buy their supplies on a weekly basis, had to make price adjustments, Brown said.

The statewide average price per gallon was up, from $1.469 to $1.485, and the statewide average low-end price charged by the smaller dealers went up from $1.239 to $1.299, Brown said.

The little guys were trying to hold prices down and absorb incremental increases in the last week, he said. They might have absorbed the cost for a little while, because people do have problems telling their customers that prices went up 7 cents.

At Webber Energy Fuels, President Michael Shea said the companys suppliers are continuing to deliver fuel and that theres no problem with supply at this point.

Webber was charging $1.589 per gallon for heating oil Monday. Shea said Webber purchases heating oil almost daily, and the price reflects market rates.

Not all small dealers believe theres a shortage problem and question why prices are high. Griffin Oil of Levant is charging one of the lowest prices in eastern Maine at $1.399, and still is offering customers the chance to buy under a prepayment plan.

I dont think theres as much a supply problem as people say there is, said Lori Griffin, whose husband owns the company that serves the Bangor area. Theres just not a demand for it yet. The price increases going on are generated from politics and a media scare.

The Associated Press contributed to this report.

http://www.bangornews.com/cgi-bin/article.cfm?storynumber=22490

-- Martin Thompson (mthom1927@aol.com), October 17, 2000