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Oregon Heating Oil Customers Get Price Relief as Economy Falters
For Oregonians who use home heating oil, the struggling economy has delivered at least one bright spot: heating bills are dropping along with the temperatures. Crude oil prices, which reached a record high of $145 a barrel in July, fell below $56 a barrel this week — a drop of more than 60% in four months. “Worldwide and domestic oil consumption has plummeted,” explained Molly Brady, President of the Oregon Petroleum Association. “Prices could keep dropping if a weak economy continues to dampen oil usage.”
According to Brady, the price of heating oil is currently $2.27/gallon — down from a peak of $4.53/gallon in July and 30% lower than this same time last November. This is welcome relief for consumers who are paying higher food costs and worrying about shrinking home values and retirement accounts.
Unlike other states, Oregon’s heating oil dealers typically don’t buy on futures contracts. Instead, they buy fuel on the spot market which means that they buy what they need at the rack rate. “That’s good news for consumers who are buying heating oil now since they aren’t paying the high prices charged during the summer,” added Brady.
Brady has heard from heating dealers throughout Oregon that fewer households are seeking to convert from heating oil. “Conversion to other forms of heating is an expensive and time consuming process. Now more than ever, lower heating oil costs mean that it is financially unwise to convert to other heat sources.”
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