Heating oil risks in hurricane season
The price of oil may change on the Energy Department's reserve report this morning. But Nancy Marshall Genzer explains how heating oil prices differ from gas and the potential purchasing risks in hurricane season.
Lighting a gas stove (Barbara Sax/AFP/Getty Images)
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Scott Jagow: This morning, the Energy Department tells us how much we have in reserve -- gasoline, propane, heating oil. It's very likely the price of oil will drop further on these numbers. For heating oil prices, this is the most important time of the year. More now from Nancy Marshall Genzer.
Nancy Marshall Genzer: Heating oil prices aren't like gas prices. They don't respond right away when the price of crude falls. That's because heating oil distributors are mainly mom and pop operations. They typically buy their oil now.
Energy analyst Stephen Schork says distributors could wait and buy their oil later, but that's taking a massive risk heading into hurricane season.
Stephen Schork: If you are a wholesaler, that is a lot of sleepless nights over the last 90 days. God forbid we have another Hurricane Katrina, another Hurricane Rita.
Those storms could threaten oil operations in the Gulf of Mexico. As it is, Schork says, consumers will pay 15 to 20 percent more for their heating oil this winter. He also expects natural gas prices to head higher -- they're already up 11 percent from last year.
In Washington, I'm Nancy Marshall Genzer for Marketplace.
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