By OGJ editors
HOUSTON, Oct. 6 -- ICF Consulting Inc., Washington, DC, warns industry and consumers to prepare for a winter with above-average volatility for US heating oil supplies.
"While the current outlook indicates that the expected normal winter-weather pattern can be managed, the risks of significant volatility are unusually high," ICF said in a report.
Crude oil prices have increased by more than 40% during the last year, raising the prices of all oil products.
Spot heating oil prices rose from an average of 74¢/gal in September 2003 to $1.30/gal in September 2004.
Crucial to US heating oil supply will be refinery production and imports from Europe, which will determine inventory levels when consumption is highest.
"Potential could exist for some severe price spikes if unanticipated shortages occur during peak-demand periods," said Zeta Rosenberg, ICF Consulting fuels vice-president.
Market uncertainty and price volatility result from increased demand for diesel fuel in the US and Europe and abnormal maintenance downtime at refineries, particularly in Europe. The possibility of below-normal temperatures adds the usual seasonal variable.
