Wednesday, October 06, 2004

The first of the federal government's fuel reserves to be tapped might not be the Strategic Petroleum Reserve on the Gulf Coast, but instead the Northeast Heating Oil Reserve located in NJ, CT and RI.

U.S. consumers will see their natural gas bills rise 15 percent this winter compared to last year, and pay 28 percent more to warm their homes with heating oil and 22 percent more to heat with propane, the government said Wednesday. . . .

The average heating oil bill is forecast to jump to $1,223 from $953 last winter, and propane costs will increase to $1,396 from $1,147. . . .

Oil inventories remain below normal largely because almost 500,000 bpd of U.S. oil production was lost in September due to hurricanes in the Gulf of Mexico, the agency said. Total U.S. oil production in September averaged 5.03 million barrels per day (bpd), the lowest level since at least 1954, the EIA said.
As faithful readers of the Globblog know, US petroleum reserves are not in fact terribly low. Private reserves are down but government holdings are up dramatically.

I'm waiting for the day when the first US Representative or Senator from the Northeast mentions tapping the heating oil reserve; a 28% price hike is serious sticker shock! Put out your feelers.

ADDENDUM: After three months of very painful heating bills under their belts, one has to wonder how much free-wheeling spending folks in the Northeast and Midwest are going to do this Christmas. We already know that consumer expenditures growth was a miniscule 1.6% in 2004:II and probably even lower in 2004:III. Can 2004:IV give any hope at all for a rebound?

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