NEW YORK (AP) — Sparked by a cold snap in the northeast, home heating fuels are getting more expensive even though supplies are well above normal for this time of year.
Heating oil futures spiked with crude oil contracts last week. Retail prices followed, surging an average of 10.2 cents per gallon for residential customers on Monday, according to an Energy Information Administration report released Thursday.
Natural gas futures also grew above $5 per 1,000 cubic feet in the past week.
Those prices are still well below what they were last year, when worries about peaking world crude demand pushed all energy commodities higher. But traders now have a tough time finding fundamental reasons for the recent jump in prices, given the amount of heating oil and natural gas piling up in storage.
The government said Thursday that the U.S. has crammed 3.7 trillion cubic feet of gas in underground caverns, the most on record. A day earlier, it said the country has 33 percent more distillate fuel on hand than it did one year ago.
Futures contracts may be rising on the expectation that natural gas producers and heating oil refiners will slow operations ahead of what weather forecasters say could be a frigid winter, said Phil Flynn, an analyst with PFGBest
"They'll stop producing because they're not making any money," Flynn said. "But we still have the bulk of the heating season ahead of us."
Meanwhile, oil prices slipped below $81 a barrel Thursday as a wobbly U.S. dollar gained against other currencies. Crude is bought and sold in dollars, so if the value of the dollar rises, an investor holding euros or Japanese yen can't buy as much crude.
For most of this year, the opposite has occurred and a weak dollar has sent crude prices spiking. Crude hit $82 for the first time in more than a year on Wednesday.
Benchmark crude for December delivery gave up 18 cents to settle at $81.19 a barrel on the New York Mercantile Exchange. In London, Brent crude for December delivery fell 72 cents to $78.97 on the ICE Futures exchange.
At the pump, retail gas prices increased for the 10th day in a row, adding 2 cents to a new national average of $2.616 a gallon, according to auto club AAA, Wright Express and Oil Price Information Service. A gallon of regular unleaded is 7.2 cents more expensive than the same period last month, but it's still 24.2 cents cheaper than last year.
In other Nymex trading, heating oil for November delivery fell 1.07 cents to settle at $2.0946 and gasoline for November delivery $2.0271 a gallon. Natural gas for November delivery gave up 15.3 cents to settle at $4.947 per 1,000 cubic feet.
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