Consumers Face Record Heating-Oil Bills

[almaty 19]

Cold weather hasn't hit the Northeast yet, but record heating-oil prices mean high heating bills are on the way for many residents.

About eight million U.S. households -- largely in New England and the Central Atlantic states -- rely on heating oil to run their furnaces each winter. Last week, heating-oil futures hit a record of $2.36 a gallon, up more than 40% since the start of the year.

Weather forecasters are predicting a colder winter than last year, despite the unseasonably warm October in the Northeast. That's going to lift heating costs no matter what fuel a homeowner uses. Consumers who use heating oil, though, will feel the most pain. Their winter heating bill for the season is expected to average $1,785, compared with $891 for households that use natural gas, according to the Department of Energy. Unlike crude oil, natural-gas prices have been relatively restrained in the U.S. this year.

Heating-oil prices are soaring because the fuel is refined from crude oil, which also has hit record prices in recent weeks.

Political unrest in places like Nigeria and Iraq, combined with Wall Street investors placing financial bets on higher energy prices, have lifted crude prices 43% since the beginning of the year. Crude fell 75 cents to $85.27 a barrel yesterday in New York Mercantile Exchange trading.

Analysts say that demand for heating oil so far has been lower than last year, and inventories are sufficient. But that hasn't seemed to matter as crude prices keep mounting.

"The price consumers pay is a function of global conditions," says Mark Wolfe, executive director of the National Energy Assistance Directors Association, a group that represents directors of state programs that help low-income consumers pay their energy bills. "If the Turks invade Iraq, suddenly your price goes up 50%."

As recently as five years ago, heating oil cost just 75 cents a gallon in the spot market. But supplies of refined products have become historically tight, as economic growth in developing countries like China and India has absorbed extra capacity.

For residents faced with a nasty heating-oil bill, the easiest way to save money is conservation. Lowering the thermostat at night or closing off rooms that aren't being used can help. Consumers also can consider switching to a more energy-efficient furnace, taking advantage of state programs that offer subsidies for this purpose, says Mr. Wolfe. Combined, measures such as these could reduce heating-oil consumption by up to 30%, he says.

Shopping around for the best price can shave off additional dollars from the energy bill. Heating-oil prices vary from supplier to supplier, sometimes by up to 30 cents a gallon, says Mr. Wolfe. Joining a heating-oil-purchasing group can also save anywhere from 15 cents to 25 cents a gallon, says Andrew Heaney, president of Heat USA, a New York-based buying association that gets better prices for consumers by buying in bulk.

Many consumers have switched from heating oil to natural gas, but buying a new furnace or converting an old one can cost thousands of dollars.

Consumers can also protect themselves against a potential rise in coming months by signing a contract with their supplier to lock in current prices for the season. But that's essentially a bet on the direction of heating-oil prices, which could backfire. Customers will pay a premium to dealers, who have to hedge themselves in case prices go up. And if prices drop, consumers will be stuck paying the higher prices they locked in.

Mr. Heaney of Heat USA says that in over 10 years in the business, he has almost always guessed wrong whether heating-oil prices will go up or down. "The market and the weather have their way of making their own story," he says

[eau_xplain 2]

Yeah...I'm not looking forward to getting our heating-oil bill this winter

[Amby 490]

use your fireplace and wear more clothes

[eau_xplain 2]

use your fireplace and wear more clothes

We just might do that! Fortunately, we have two working fireplaces in the house. Unfortunately, none of them are in the upper level of the house ... brrrrr. And I might get a portable heater for the bathroom so it's not too cold when I go take a shower early in the morning.

[Kevin and 10]

use your fireplace and wear more clothes

We just might do that! Fortunately, we have two working fireplaces in the house. Unfortunately, none of them are in the upper level of the house ... brrrrr. And I might get a portable heater for the bathroom so it's not too cold when I go take a shower early in the morning.

MN has the cold weather rule. A Company can't shut off you heat in the winter months if you can't pay bills. What happened last year is some people didn't pay and made no attempt to pay even after winter. So companies shut off their gas for the summer and now charging a reconnect fee along with reporting credit.

[Amby 490]

we have an old wood burning stove so I'm going to attempt to kill two birds with one stone...not sure how cooking on the flat top of the stove will work out

[Nagishkaw 510]

It's par for the course. They always invent ways to hike up your bill . Pimps.

[russ 1]

we have an old wood burning stove so I'm going to attempt to kill two birds with one stone...not sure how cooking on the flat top of the stove will work out

We are here in FL, so are just past the expensive AC part of the year. $400 electric bills are now over. Even though the power company uses mostly coal and nuclear here, they still charge about 15 cents a kilowatt hour. Strangely, a Florida utility can afford to sell to Massachusetts at 5 cents a kilowatt hour.

[JohnK 0]

Maybe it would be cheaper to convert to gas than to keep paying for oil?

[Hilarious Clinton 452]

What happened to global warming?

[GaryC 7]

What happened to global warming?

Global warming is your friend. No more cold winters!!

[w¡n9Nµ7 §£@¥€r 123]

What happened to global warming?

I can't wait!

[Jasman0717 9]

The bill has to be high with how much oil has increased

[Marilyn. 340]

we have gas heat....

[eau_xplain 2]

Maybe it would be cheaper to convert to gas than to keep paying for oil?

We've actually considered that and hubby had talked to the gas company a few months after we bought the house. We're in a "strange" situation. Our property line is the county line. According to the gas company, there is no gas line on the street where we are. However, the business next door (which sits on a corner lot) belongs to a different county and they have gas. So, we might talk to the gas company again and see if it would be possible to tap off that gas line.

But, we just got done with our huge "window project". We'll see how much savings in heating oil bill that will give us.