State Senate to debate oil bill

By AARON SANBORN

asanborn@seacoastonline.com

March 29, 2011 2:00 AM

 

CONCORD — The Senate version of a bill that aims to regulate guaranteed price plans and prepaid contracts for heating oil, kerosene and natural gas is scheduled to hit the Senate floor on Wednesday.

 

Senate Bill 197 passed the Senate's Commerce Committee last week and will now be debated on the floor.

 

The bill establishes a provision where companies offering prepaid contracts for heating fuel reserve funds equivalent to 75 percent of the total amount of prepaid balances in an escrow account with the New Hampshire attorney general's office named as beneficiary.

 

Officials at the AG's office say the provision allows for consumers to be reimbursed if something goes wrong with the oil company.

 

The same bill was initially introduced in the House as House Bill 581 by state Rep. Lee Quandt, R-Exeter, but it stalled in the House when it was retained by Commerce and Consumer Affairs Committee because of concerns over a no reporting requirement to show oil companies are complying with the new law.

 

Quandt worked on the bill with Assistant Attorney General James Bofetti in response to the Flynn's Oil case, in which the company went bankrupt in December 2009 and left more than 300 customers of the Exeter-based company without the $554,603 worth of oil they purchased at the start of the winter season.

 

Soon after the bill stalled in the House, Sen. Molly Kelly, D-Keene, approached Bofetti about proposing the bill in the Senate in response to the unexpected closure of Keene oil company Jackson Energy earlier this month.

 

"This bill is a positive move for both consumers and businesses," Kelly said. "We will provide greater protections for consumers that enter into prepaid contracts and allow the industry to maintain its reputation after a few recent and unfortunate calamities"

 

If the bill passes the Senate this week, Kelly said she'd work with the House to clear up any concerns about it.

 

"This is a serious problem that needs to be addressed in a timely manner in order to protect both consumers and fuel distributors and prevent further losses to both parties," Kelly said.

 

Quandt said getting the bill through Senate would be a positive development but admits that he's still expecting a fight from the House.

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Northeast Home Heating Oil Reserve Multimedia Information

On July 10, 2000, President of the United States Bill Clinton directed Energy Secretary Bill Richardson to establish a 2-million-barrel home heating oil component of the Strategic Petroleum Reserve in the Northeast. The intent was to create a buffer large enough to allow commercial companies to compensate for interruptions in supply or severe winter weather, but not so large as to dissuade suppliers from responding to increasing prices as a sign that more supply is needed.

 

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Morning Heating Oil Market Report for 3/29/2011

 

May heating oil prices traded lower during the initial morning hours and reached their lowest levels since March 18th. However, some traders noted that there were a number of positive demand factors facing the distillate market, including weather forecasts that call for cooler temperatures across the northern US and increased diesel demand ahead of the spring planting season. The National Weather Service expected heat-related demand for heating oil to run about 18.8% above normal in the coming week.

Read more: http://www.ibtimes.com/articles/128141/20110329/morning-heating-oil-market-report-for-3-29-2011.htm#ixzz1IZ7NaR7t

 

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Oil Climbs to 30-Month High on Demand Outlook After U.S. Jobs

Oil climbed for a third day in New York as signs of a strengthening U.S. economy boosted bets fuel demand will rise in the world’s largest crude user.

 

Futures advanced as much as 0.7 percent to a 30-month high after an April 1 report showed the U.S. added more jobs than economists forecast last month. Prices advanced 2.4 percent last week as fighting in Libya threatened to prolong supply cuts in Africa’s third largest producer.

 

“The U.S. data paints a positive picture,” Jonathan Barratt, managing director of Commodity Broking Services Pty in Sydney, said by telephone today. “People are still concerned about Libya, but not overly. If Qaddafi decides to call it a day, then there will be a short, sharp sell-off.”

 

Crude for May delivery gained as much as 80 cents to $108.74 a barrel in electronic trading on the New York Mercantile Exchange, the highest since Sept. 24, 2008, and was at $108.52 at 3:13 p.m. Singapore time. Prices are up 25 percent from a year ago.

 

Payrolls advanced by 216,000 workers in March compared with a 190,000 gain projected by economists in a Bloomberg News survey. The jobless rate dropped to 8.8 percent from 8.9 percent, the fourth straight decrease, the Labor Department said. The unemployment rate was projected to hold at 8.9 percent, according to the median forecast in the survey.

 

Brent Premium

 

Brent oil for May settlement rose 59 cents, or 0.5 percent, to $119.29 a barrel, on the London-based ICE Futures Europe exchange. The contract climbed $3.11, or 2.7 percent last week.

 

The European benchmark traded at a premium of $10.73 a barrel over U.S.-traded West Texas Intermediate futures. The difference between front-month contracts in London and New York surged to a record $19.54 on Feb. 21 as unrest spread in the Middle East and North Africa and stockpiles climbed at Cushing, Oklahoma, the delivery point for WTI. The gap averaged 76 cents last year.

 

Oil in New York has climbed 28 percent since anti- government protests began Feb. 15 in Libya, cutting output there by two-thirds. The conflict is the bloodiest in uprisings that have toppled the presidents of Tunisia and Egypt and spread to Bahrain, Iran, Yemen and Oman.

 

An emissary of Libyan leader Muammar Qaddafi met with Greece’s prime minister yesterday and may be seeking a political or diplomatic solution to hostilities, according to Greek Foreign Minister Dimitris Droutsas.

 

“Upcoming elections in Nigeria amid the intensified unrest” in the Middle East and North Africa region may add to concern over oil supplies, Mark Pervan, head of commodity research at Australia & New Zealand Banking Group Ltd. in Melbourne, said in an e-mailed note.

 

Nigeria Elections

 

Nigeria, Africa’s top oil producer, will hold general elections a week later than planned, the electoral commission said, after a vote to elect lawmakers ended in chaos on April 2.

 

Parliamentary elections, which had been rescheduled to start today, will take place on April 9, while the presidential vote is set for April 16, Attahiru Jega, head of the Independent National Electoral Commission, said yesterday.

 

Nigeria pumped 1.92 million barrels a day in March, according to estimates compiled by Bloomberg News. Saudi Arabia, the largest producer in the Organization of Petroleum Exporting Countries, pumped 9 million barrels a day.

 

Hedge funds more than doubled bullish bets on natural gas as the U.S. economy strengthened and Japan struggled to contain its nuclear crisis, raising speculation that the nation’s demand for the fuel will rise.

 

Funds and other large speculators increased net-long positions, or wagers on rising prices, by 42,060 futures equivalents to 76,985 in the seven days ended March 29, according to the Commodity Futures Trading Commission’s weekly Commitments of Traders report.

 

In other markets, bullish, or long, bets on gasoline prices rose 5.6 percent to 61,367 futures and options combined, the CFTC data showed. Net-long bets on heating oil increased by 5.5 percent to 37,625.

 

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