Gulf crisis' impact on heating oil uncertain

September 10, 1990|By Jon Morgan | Jon Morgan,Evening Sun Staff

The impact of the Persian Gulf crisis on heating oil supplies and prices this winter is impossible to predict, but experts say they have seen little evidence so far to suggest a repeat of last December when a record cold snap led to shortages and drastic price increases.

After Iraq invaded Kuwait last month, prices for heating oil jumped to $1 a gallon. However, the supply has been steady. The Bush administration fears a shortage could develop late in the year, but experts say this will depend upon whether other oil-producing nations step up their output sufficiently to compensate for the loss of embargoed oil.

In the back of everyone's mind: last year's disastrous December when prices shot up by an average of 45 cents a gallon, to $1.40 and higher, along the East Coast.

"It's too early to tell. A lot of that will depend on what goes on overseas," said Charles Muller, general manager of Cook's Tank Line, a local distributor of heating oil. "No one, to my knowledge, has been cut off by their suppliers."

Bob Irvin, president of the Mid-Atlantic Petroleum Distributors Association, a trade group of independent distributors, cautioned against comparisons with last December.

"There was no sinister force at work -- it was very cold," he said. The coldest weather in 60 years forced homeowners to run their furnaces longer and increased demand for oil among oil-burning utilities.

"There's a good stock right now. The stock in the United States is higher now than at this time last year," Irvin said.

Some members reported getting inquiries and orders for heating oil shortly after the Gulf crisis developed, but sales have leveled off since, he said.

"There's no reason for alarm now. Don't be pushed into panic TC buying," he said.

Edward Dupree, chief of energy programs for the city's Urban Services Agency, said the price increases of last December drove many clients to his office seeking grants from the state's Energy Assistance Program.

Sustained price increases from the Gulf crisis could have the same effect, he said. But so far, there has been no sign of a problem with supplies, he said.

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