(The Center Square) – Recent moves by oil-producing nations in the OPEC cartel may put downward pressure on heating oil prices, according to a Connecticut-based energy market expert.
Average heating oil prices in the state were in a decline from pre-pandemic levels in recent months, hitting a low of $2.744 per gallon as of Aug. 16, but climbed back up to $2.797 a week later, a Connecticut Department of Energy and Environmental Protection weekly report said recently.
OPEC is an alliance of nations, mostly located in the Mideast, that for decades have dominated the production of petroleum globally, although in recent years the United States and Russia have surpassed the leading OPEC nations such as Saudi Arabia, Iraq and Iran in oil output.
“All the refined products like heating oil tend to follow crude oil prices,” Chris Herb, president of the Connecticut Energy Marketers Association, told The Center Square. "There has been speculation that OPEC was going to rapidly increase production, which has kept prices down, but today they decided to continue a more paced schedule to increase oil supply."
Consumers might see lower prices for fuel and heating oil, he said. Meanwhile, COVID-19 remains a concern to Wall Street traders. The delta variant’s increase has kept prices in check, Herb said.
“The fear is that if the country goes back into a full or partial quarantine it will kill demand for refined products and crash prices similar to what we saw last year,” he said.
Gannon Long, policy and public affairs director for Operation Fuel, Connecticut-based nonprofit, told The Center Square that a decline in fuel and heating oil prices would most directly benefit the most vulnerable residents.
"What the price decline could mean is that fewer working households will need to seek assistance for their home heating," Long told The Center Square.