BANGOR (AP) – The price of heating oil is approaching the record price in Maine, and the weather hasn’t even turned that cold yet.

In its weekly survey of heating fuel prices, the State Planning Office found that oil was selling for an average of $1.70 a gallon statewide on Monday. That’s 7 cents higher than a week ago and 45 cents higher than a year ago.

It’s also just 8 cents lower than the highest statewide average price ever recorded in Maine, during the 1999-2000 winter, according to the Office of Energy Independence and Security.

Last winter, the highest average price was $1.56 a gallon. Crude oil, the basis of heating oil, reached record prices Monday and inched within 36 cents of $50 a barrel.

The heating oil season typically runs from Oct. 1 to April 30, with prices peaking in February or March. But this is not a typical year, said Jamie Py, executive director of the Maine Oil Dealers Association.

This year, industry analysts cite a presidential election, the Iraq war, terrorism or political unrest in at least five oil-producing countries, and Hurricane Ivan as reasons for supply disruptions or higher prices.

In Maine, some dealers are questioning whether the price hikes are being fueled by jittery analysts or traders on the New York Mercantile Exchange, where crude oil is bought and sold.

Bob Moore, senior vice president of Dead River Co. in Portland, said analysts sometimes talk up the oil prices without good reason for the prices to rise.

“It’s a crazy time right now in the futures market,” he said. “I haven’t seen anything like it. I haven’t seen anything like these jumps in prices. We’re getting squeezed.”

Customers who are trying to figure out the best time to buy are calling oil dealers for advice, but even the dealers are having trouble pinpointing what the marketplace is doing or how high the price is going to go.

In late spring, some of the state’s heating oil dealers walked away from their annual rituals of offering customers price caps or budget plans because prices were too high for that time of the year.

The dealers thought they would wait for the prices to get lower, and so did many consumers. Instead, prices went up.

Eventually, during the summer, a good number of the oil dealers did decide to offer price caps or other price-protection plans to customers, Py said.

“They’re primarily looking out for the best interests of their customers,” he said.

Other smaller dealers are choosing to be “rack sellers” this year, buying their loads at whatever the price is when the oil tankers reach Maine and turning around and selling it to homeowners at that rate.

As of Monday, Py said, fewer customers have secured their heating oil supplies for this winter than in previous years, and not all of the smaller dealers have locked in their loads for the winter months either.

“It’s a matter of risk – how much risk does the homeowner want to take at this point?” Py said.


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