Nearly two-thirds of Maine dealers raise their oil prices

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Heating oil bills swell Nearly two-thirds of Maine dealers listed on a Web site raise their prices significantly Friday. Source: Portland Press Herald Publication date: 2000-10-14 Arrival time: 2000-10-15

The average price of a gallon of heating oil in Greater Portland edged up nearly five cents Friday, a day after an attack on a U.S. Navy destroyer in Yemen and Israeli attacks on Palestinian targets fed fears that oil supplies might shrink. Local dealers were selling oil at an average of $1.433 per gallon Friday, up from $1.386 on Thursday, according to MaineOil.com, a Web site that lists prices daily. Nineteen of the 33 dealers who participated in the service showed price increases. The increases ranged from 3 cents by Paul's Oil Service in Portland to 12 cents by A. Pinette & Son of Westbrook.

Prices ranged from $1.219 to $1.549.

The price of kerosene increased from an average of $1.64 on Thursday to $1.69 on Friday. The prices ranged from $1.56 to $1.80.

More instability in the Middle East could send prices shooting higher, said Jerry Wallace, the supply manager for the Dead River Co. in Scarborough.

"If that happens, there is no ceiling to what prices could go to," he said. "But if that calms down, we could see some of these increases roll back."

Wallace also noted that some forecasters have predicted New England's string of milder-than-normal winters could come to an end this year. That would increase energy consumption and possibly push prices higher, he said.

Several dealers said the significance of Thursday's events could be seen in how quickly their wholesalers reacted by raising prices.

Rita Blais, the general manager of Royal Oil. Co. in South Portland, said her company began receiving messages before noon that wholesalers were raising prices 10 cents per gallon for oil and 14 cents for kerosene. The last time she could recall prices rising in the middle of the day was at the start of the Persian Gulf War in 1991 when they jumped 25 cents per gallon, she said.

But Blais and other dealers said it was nearly impossible to predict what prices will do next.

"I think it's probably going to stick around for a few days," Robert Pineo, the owner of A. Arnold Oil Co. in Scarborough and Old Orchard Beach, said of the increases. "Even some of the bigger oil companies can't seem to figure it out."

Further confusing the picture was a decline in crude oil prices trading in New York on Friday after reports that Saudi Arabia would not consider suspending oil exports to punish the United States for its support of Israel in its fights with Palestinians.

Prices dropped again later in the day when U.S. Energy Secretary Bill Richardson revealed that several American energy companies have agreed not to export their oil. Instead, the companies will keep their heating oil in the U.S. market for domestic consumption with supplies so tight and winter approaching.

Brent crude for December delivery fell 74 cents to $33.85 a barrel. U.S. light sweet crude for December delivery fell 51 cents a barrel in New York trading.

Wayne Mitchell, a spokesman for the Maine Oil Dealers Association, said his group was unable to predict where prices will go next.

"We're attempting to read the situation and determine what the short- and long-term impact is going to be," he said. "Like everybody else, we're watching what's taking place."

Staff Writer Allan Drury can be contacted at 791-6461 or at:

http://cnniw.yellowbrix.com/pages/cnniw/Story.nsp?story_id=14824812&ID=cnniw&scategory=Energy%3AOil

-- Martin Thompson (mthom1927@aol.com), October 15, 2000


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