Heating oil estimates 'could be too low'

24 October 2007

Official estimates of the price of heating oil for the coming winter could prove to be too low, according to a US government official.

The US Energy Information Administration (EIA) recently predicted that fuel costs for households using heating oil would be 22 per cent higher in the coming winter than the previous one, because of a combination of an increase in prices and the likelihood of colder temperatures.

However, the price of crude oil has risen since that information was published and the EIA's Guy Caruso believes that will have a further impact on the cost of heating oil, reports Reuters..

Mr Caruso told the news agency that if the price of US crude remains at $85 (£41.56) a barrel or above then the rise in heating oil prices will be bigger than previously expected.

"If the crude prices stay high, we'll see some more pass through on to the heating oil as well," he added.

The Met Office has predicted the UK will also experience a colder winter than last year, meaning the combination of high crude oil prices and lower temperatures is likely to have a similar impact on the fuel costs of British heating oil users.

As a result, customers may find they can save money by buying their winter supplies early before the price of heating oil rises further.