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For release Monday editions, Jan. 8, and thereafter

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Warm weather spells relief for heating oil customers

PORTLAND – That sound New Englanders are hearing in their basements – the sound of silence as their oil-burning furnaces sit idle – is saving them money as heating oil consumption drops with this season’s warm temperatures.

Phyllis Bowie’s furnace at her Buxton home has been kicking on just a fraction of what it would in a normal winter. She estimates that her oil consumption is down by more than 100 gallons so far because of the mild weather.

That adds up to more than $200 in savings.

“We usually try to top off our tank when prices drop,” Bowie said. “But we haven’t even had to do that for a month.”

A higher proportion of New Englanders use oil as their primary heating source than any other region, ranging from more than 70 percent in Maine to about 39 percent in Massachusetts.

Last summer, oil prices were expected to be high this winter. Many consumers bought or contracted to buy their oil for the winter then at prices of more than $2.50 a gallon.

But prices have failed to rise as predicted. In Maine, they fell from a statewide average of $2.48 a gallon in early September to $2.29 last week. In New Hampshire, they went from $2.56 to $2.39 a gallon. Vermont’s average “pre-buy” price was $2.74 a gallon in June, when many customers locked in; spot market prices last week averaged $2.51.

Prices have fallen as mild weather has undercut demand. While back-to-back blizzards recently paralyzed the Plains states, the Northeast has been springlike, with golfers hitting the links and flowers blooming.

Meteorologists say the warm spell is due to a combination of factors. El Nino, a cyclical warming trend now under way in the Pacific Ocean, can lead to milder weather, particularly in the Northeast. Meanwhile, the high-altitude jet stream is running farther north than usual over the East Coast, allowing warm southern air to flow into the region.

Last month was the warmest December on record in Boston and Concord, N.H., and the second-warmest in Portland. The National Weather Service is predicting above-normal temperatures for the winter as a whole in the Northeast.

In December, the number of heating-degree days – a measure of how much fuel it takes to heat a building – was 18 percent lower in Portland than the average for the month. Heating-degree days were off by 20 percent in Burlington, Vt., and more than 21 percent in Boston and Concord, N.H.

In theory, oil consumption should go down roughly the same amount. That’s just fine with people seeking a respite from high prices, said Matt Marks, general manager of Yorkie Oil Co. in Scarborough, which was selling oil for a cash price of $1.97 a gallon late last week.

“People are pretty happy seeing the relief in their wallets,” Marks said.

The story is different for heating oil dealers, who prepare for each winter by signing contracts for oil and hiring drivers and other staff, said Jamie Py, president of the Maine Oil Dealers Association.

“When you’re selling 30 percent less volume, you’re certainly going to be hurting,” Py said.

Shane Sweet of the Vermont Fuel Dealers Association said many of his members signed up to take specific amounts of oil – betting in advance on how much they’ll need in a given month. When their tank farms are too full to take deliveries, they face penalties from wholesalers, Sweet said.

Because prices typically rise in winter, signing a pre-buy agreement usually is a good move for consumers, said Peter Bourne, owner of Bourne’s Inc., a fuel dealer in Morrisville and Waterbury, Vt. If a customer comes griping, “I tell the consumer it worked for 10 years in a row. This year it didn’t work. It didn’t work for the dealers, either.”

Bob Garside, president of the Oil Heat Council of New Hampshire, notes that dealers still have wholesalers and workers to pay, even if customers aren’t buying as much oil.

“The whole heating oils industry is based upon November, December, January, February and March,” he said. “If you lose November, December and now January, it’s disastrous.”

While dealers can control costs, they can’t control the weather, Py said.

“If the weather patterns don’t change, it’ll be difficult for all businesses that rely on the weather, including oil dealers,” he said.

Phyllis Bowie understands the mild winter is taking a toll on dealers, but said at least regular folks like her are saving a few dollars. The savings are particularly useful with Christmas bills to pay, she said.

“Usually this time of year, everyone’s so broke it’s hard to come up with money for the oil,” she said.

Associated Press writers Beverley Wang in Concord, N.H., and David Gram in Montpelier, Vt., contributed to this report.