US to loan emergency heating oil to ease Northeast prices
The Energy Department will loan up to 315,000 barrels from its Northeast heating oil reserve to ease high prices, Fox Business, The New York Times and the Portland Press Herald reported. Maine's two senators praised the move. Some analysts say it is too small to help much.
The Energy Department will loan up to 315,000 barrels of heating oil from an emergency reserve to help lower prices, according to Fox Business, The New York Times and the Portland Press Herald. The department announced the plan on Wednesday.
That is nearly a third of the 1 million barrels in the Northeast Home Heating Oil Reserve, the Times and Fox Business reported. The reserve has been tapped only twice before, most recently after Hurricane Sandy in 2012, the Press Herald said. This is the first time it has been used to lower prices.
Companies will bid to borrow the oil, the outlets reported. They must later return the same amount plus extra, Fox Business and the Press Herald said. The oil will come from sites in Boston, South Portland in Maine and New Haven in Connecticut, Fox Business reported. Deliveries are set to be done by November 13, and bids are due October 27.
Energy Secretary Chris Wright said he acted after a letter from Maine's senators, Susan Collins and Angus King, Fox Business reported. "This is a temporary measure to solve a temporary supply disruption," Wright said, according to the Times.
Heating oil prices have soared since the war in Iran began in February, the outlets reported. In Maine, prices average $5.97 a gallon, the Press Herald said. About half of Maine homes heat with oil, Collins said, according to Fox Business.
Collins, a Republican, and King, an independent, both praised the move. "This release of stored oil in New England will hopefully be some help," King said, according to Fox Business. Collins is running for reelection against Democrat Troy Jackson, the Times and the Press Herald reported.
Collins said the release would raise New England's heating oil supply by 13%. But analysts say it is too small to make much difference, the Times reported. "The volume is too small relative to consumption to significantly change supply," said William O'Neil of S&P Global Energy, according to the Times.
What we know: The Energy Department will loan up to 315,000 barrels, with deliveries by November 13.
What we don't: How much the oil will lower prices this winter.
Where outlets agree Fox Business, The New York Times and the Portland Press Herald report that the Energy Department will loan up to 315,000 barrels from the Northeast Home Heating Oil Reserve.
Where they differ The cited reports agree on the key facts so far.