ROANOKE TIMES 
                      Copyright (c) 1996, Roanoke Times

DATE: Tuesday, October 1, 1996               TAG: 9610010055
SECTION: BUSINESS                 PAGE: B-7  EDITION: METRO 
DATELINE: WASHINGTON
SOURCE: Associated Press

HEATING OIL LIKELY BE HIGHER THIS WINTER

Home heating oil is expected to cost more than $1 per gallon this winter, up about 10 percent from than last winter, according to government figures released Monday.

The increase is due to higher crude oil costs and tight domestic and European oil supplies, said the U.S. Energy Information Administration.

``From the consumer's standpoint, we would have to say we are moving into uncharted territory,'' said Jay Hakes, the agency's administrator. ``We have not entered a winter in recent history where we've had stocks this low.''

About 12 percent of the nation's homes are heated with oil, about 75 percent of them are in the Northeast. Most homes in the rest of the country are heated with natural gas or electricity.

A 10 percent increase in home heating oil, or about 9 cents per gallon, would mean about $90 more than last year's cost for a family using 1,000 gallons this winter.

Very cold weather could push the price up to about $1.06 per gallon, the EIA said. That would mean $140 over last year's cost for 1,000 gallons.

Last winter, home heating oil cost an average 92.6 cents per gallon.

The estimates assume that worldwide crude oil prices will drop as production increases. If they do not, retail home heating oil prices could also be expected to rise higher than currently projected, the agency said.

Stocks of distillate, which refineries make from crude oil, are projected to be 19 million barrels below last year's levels at the beginning of winter, and to peak at 7 million barrels below last year's high. Distillate is used for heating oil and diesel fuel. A barrel contains 42 gallons.

Although demand for home heating oil is expected to be lower this winter, because of forecasts of less severe weather than last year, demand for distillate is still expected to rise because economic growth has boosted demand for diesel fuel for transportation.

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