Warm winter to help Americans with heating bills

NEW YORK (Reuters) - Forecasts for a warm winter may spell relief for households and businesses in the U.S. Northeast dealing with record high heating oil prices.

Government and private forecasters are predicting a warmer-than-normal winter in the United States thanks to the La Nina phenomenon, a cooling of ocean temperatures in the equatorial Pacific Ocean.

If the outlook holds true it would cut into the amount of heating oil Americans will need this winter as the key winter fuel soars to all-time peaks near $3.30 a gallon, tempering the impact of monthly heating bills and possibly pulling prices lower, dealers said.

"In the long run I think heating oil is going to be coming off," said a heating oil trader based in New York. "There's plenty of product out there with a warmer-than-normal overall prediction for the winter."

The Northeast is home to 80 percent of U.S. heating oil demand, making it the largest heating oil market in the world.

Near-term outlooks by private forecaster Accuweather, also largely calling for a normal winter, are "not bullish for heating oil in the short-term," noted a Houston-based market watcher.

"Looking further out, the forecasts I've seen for Jan-March are for mostly milder than normal (temperatures) as well. While all these are only forecasts, we look pretty well set for winter distillate at this point," he added.

U.S. heating oil supplies are running about 34 percent lower than last year, though energy experts said this is largely due to a change in the way the fuel is counted after recent environmental regulation changes.

Heating oil distributors say there is adequate supply to meet demand this winter, particularly if the winter turns out as warm as forecasters expect. And they blame the high price on surging costs for crude.

"There were a lot of calls (from households) into the retailers asking why prices are so high," said Michael Ferrante, President of Massachusetts Oilheat Council, which represents 250 retailers and wholesalers in the state.

"People are concerned about their heat bill ... And it goes back to one reason; the price of crude oil," said Ferrante.

According to government data, the average price U.S. households paid for heat oil rose last week to a record $3.29 a gallon, up 35 percent from a year ago. In New York City, prices topped $3.50 a gallon this week, up 33 percent year-on-year.

This comes as the price of crude surged late last month to a peak near $100 a barrel amid heavy speculation and concerns that global demand is rising faster than supply.

Oil prices have eased since on worries that a soft economy could slow the pace of demand growth.

(Editing by Christian Wiessner)