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Tags: heating oil

New York, New England Rationing Heating Oil

(Newsmax)

By    |   Tuesday, 25 October 2022 04:25 PM EDT

Heating oil stockpiles are at a third of normal levels for this time of year, causing suppliers to begin rationing in New York and New England, the Daily Mail reports.

The northeast heavily relies on heating oil, which is similar to diesel fuel, for home heating, leading to fears of shortages as winter approaches. About 90% of the country heats with other methods.

Heating oil wholesalers have started limiting allocations to retail suppliers in the area, Chris Herb, president of the Connecticut Energy Marketers Association, told Bloomberg News.

The rationing, which is meant to prevent panic-buying and hoarding, limits the amount of heating oil consumers can buy, Herb said.

The drop in supplies is the result of the same issues hitting the world oil markets, the Mail reported, such as a lack of rebuilt production capacity after the pandemic and disruptions caused by Russia's invasion of Ukraine.

Stockpiles also are being affected by "backwardation," Bloomberg reports. Backwardation is a pricing structure that charges more for prompt deliveries than future deliveries.

"There's just no incentive to store large amount of product," Michael Ferrante, president of the Massachusetts Energy Marketers Association, told Bloomberg.

Prices of heating oil hit $4.09 a gallon in New York last week compared to $2.46 a year ago.

Homes heated with heating oil are expected to see their costs rise 27% this winter, the Energy Department estimated. Homes heated with natural gas are expected to see increases of 28%, and those heated with electricity will rise by 10%.

© 2022 Newsmax. All rights reserved.


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Heating oil stockpiles are at a third of normal levels for this time of year, causing suppliers to begin rationing in New York and New England.
heating oil
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2022-25-25
Tuesday, 25 October 2022 04:25 PM
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