Low Supplies Help Keep Heating Oil Price High

     It seems like we just can't win on heating-oil prices. The U.S. Energy Department estimates that we're going to pay 10 percent more for heating oil this winter than we did last year, even though temperatures for the season are forecast to be 2 percent higher.

     And here's something that isn't going to help: U.S. inventories of diesel fuel and heating oil have dropped to a three-year low, just at a time when we're going to need them the most!

     There are a couple of reasons why prices are rising and supplies are dropping:

• Crude oil inventories are tighter because the political unrest in Libya has cut the country's exports to near zero.
• Competition for diesel fuel, which is essentially heating oil but with a lower sulfur level, is growing as the world's automobile fleet expands. Diesel fuel is a factor in the U.S. for trucking, but it's the primary automobile fuel in most of the rest of the world.

      In fact, the U.S. now is a major exporter of diesel and heating oil, also known as distillate fuel. U.S. exports topped 600,000 barrels a day last year, up from 100,000 barrels a day in 2003, according to the