NEW YORK – It didn’t happen Wednesday, it may not happen Thanksgiving day, but the price of oil seems destined to burst through the $100 mark sometime soon, leaving higher pump prices and rising heating fuel costs in its wake.
Energy futures balked on that drive Wednesday after the government reported that supplies at a key oil terminal in the Midwest rose for the first time in weeks. Analysts said it was a pause, not a retreat for energy futures that reached as high as $99.29 in electronic trading overnight.
Overall crude inventories fell, and distillates including heating oil dropped more than expected last week, the Energy Department’s Energy Information Administration reported.
The mixed report did little to shake the prevailing view that oil supplies will tighten amid rising global demand, particularly from fast-growing economies in China and India.
“It’s two steps forward, then one back in terms of this week’s inventory cushion,” said Tim Evans, an analyst at Citigroup Inc. in New York.
Wednesday’s inventory report could mean more bad news for heating oil customers already expecting costs to rise 22 percent this winter. Heating oil futures fell 0.27 cent to settle at $2.6874 a gallon on the New York Mercantile Exchange after earlier hitting $2.7154, a new record.
At the pump, meanwhile, gas prices fell 0.1 cent overnight to a national average of $3.089 a gallon, according to AAA and the Oil Price Information Service. In Spokane, the average price of a gallon of regular unleaded gas was $3.26 Wednesday, according to AAA; in Coeur d’Alene, it was $3.11. Gas prices will likely remain flat or fall unless oil reaches $100 a barrel or higher, analysts say.
Crude prices are within the range of inflation-adjusted highs set in early 1980. Depending on how the adjustment is calculated, $38 a barrel then would be worth $96 to $103 or more today.