Winter heating oil picture unclear

With the crispness of fall already biting through the air, many people throughout New Hampshire have one thing on their mind, and it’s not the foliage. It’s oil prices.

Though the cost of heating oil has been low in comparison to the last year’s massive spike, oil dealers and oil experts are expecting another, more modest, increase in the price of oil this winter.

While Julianne Estes of Hometown Oil in Portsmouth, said that her company does not expect prices to go through the roof this winter as they did last year, she said she believes that price levels are higher than they should be right now, leading her company to believe that things will have to break at some point. Although, she added, in the current economy, things don’t always happen as they should. She said that the best-case scenario would be crude oil costing $60 a barrel. On Thursday, the price of a barrel of crude was $72.

“Things are really going to be rocky up and down this winter,” said Estes.

Currently, according to, which lists the price of heating oil throughout the region, New Hampshire oil prices range from a high $2.38 a gallon in Stratham to $2.05 in Lebanon.

The average price of $2.264 gallon is more than a dollar lower than the $3.38 being charged at the same time last year.

According to the Energy Information Administration, crude oil prices are in a state of serious fluctuation. The West Texas Instruments price was $71.47 a barrel at the end of June, falling to $59.62 a barrel by mid-July. By the beginning of August, the price was back up to $71.59a barrel. The EIA’s Short Term Energy Outlook predicts that the price of crude will remain relatively flat, at $70 a barrel, toward the end of 2009 and rise slowly to $72 a barrel through the winter of 2010.

Heating oil customers have a choice to make in the matter. They can pre-pay for oil at today’s prices, which would be a wise investment if prices do indeed rise as much as the experts predict.

If they don’t, however, the same customers will have already paid a higher price as they watch oil prices drop over the course of the winter. This was a problem that affected many customers last winter, as pre-paid oil contracts of about $4 a gallon seemed ridiculously overpriced as prices wound up dropping to somewhere around $2 a gallon.

According to Goldman Sachs’ price forecast, crude oil prices could rise 40 percent this coming winter, not reaching the record high prices of 2008 but still hitting somewhere around $3 a gallon, comparable to the price range seen in 2007.

The EIA tracked the price of heating oil from $2.72 a gallon in 2007 to a high of $3.38 a gallon in 2008, before dropping to $2.51 a gal earlier this year. The prediction for 2010 is $2.76 a gallon.

However, according to Bob Garside, president of the Oil Heat Council of New Hampshire, oil prices are one big guessing game that can change drastically at any moment.

“Oil prices change with the wind,” said Garside. “Whatever you say in predicting oil prices, you’re going to be wrong anyway.” — LAURA CHAMBERLAIN/NEW HAMPSHIRE BUSINESS REVIEW