BANGOR (AP) – Although demand for heating oil is lowest in the summer, prices are staying well above the expected $1 per gallon price and seem ready to remain high into the fall.

“The prices are going through the roof,” said Bob Moore, senior vice president of Dead River Oil Co. “It’s a really troubling scene right now.”

As crude ail prices went above $40 a barrel early in the summer, heating oil prices stayed at around $1.35 a gallon instead of dropping, as oil dealers expected.

“You’re looking at midwinter prices right now,” said Jamie Py, executive director of the Maine Oil Dealers Association. “None of us really know why.”

Because of the uncertainty in the crude oil markets, many suppliers did not offer consumers the chance to lock in a price for the winter under pre-buy or fixed-rate plans.

Some suppliers that did offer pre-buy plans didn’t encourage consumers to lock in prices in early summer, hoping prices would go down.

Now that crude oil has surpassed $46 a barrel, many suppliers still don’t know what to do, and are postponing purchases in hopes of lower prices.

“It’s not the oil dealers’ fault right now,” said Chris Brown of MaineOil.com, a Web site that tracks heating oil prices across the state. “Consumers are just like oil dealers. Nobody’s buying any oil because they’re waiting to see what happens.”

Dead River did offer a price-cap program, but that price has risen 10 cent in the last three months. The current cap is about $1.74 per gallon.

“If I were a customer and I didn’t have a cap, I think I’d be very sorry come winter,” Moore said.

On the gasoline front, many stations are holding prices steady in the face of rising crude oil costs, slashing their profit margins in hopes of keeping customers.

“The margins are shrinking to almost nothing,” Py said. “The price that you’re paying at the pump is about the same as the price to deliver it to the pump.”

AP-ES-08-17-04 0217EDT



Only subscribers are eligible to post comments. Please subscribe or to participate in the conversation. Here’s why.

Use the form below to reset your password. When you've submitted your account email, we will send an email with a reset code.