Jeff Clifford will be keeping one eye on the winter weather and the other on the economy.
Like the other Berkshire entrepreneurs in his field, the owner of Clifford Oil in Lenox is preparing for the home heating season.
While forecasters predict a colder than normal winter, Clifford said it's hard to say how the cold will affect home heating oil prices.
"All of these markets are somewhat manipulated. So when you really get down to it, the fundamentals of supply and demand don't have the effect like they should have in years past," he said.
"I would say it's more of a crapshoot: You stick your head out and go one way or the other," Clifford said. "But it tends to follow the economy.
Last week, the federal government predicted that most U.S. households will pay more for heat this winter. Heating oil users can expect a slight break, but still pay near-recond prices to keep warm.
Prices for natural gas, electricity and propane should be higher, the primary reason that more than 90 percent of homes will incur higher heating expenses.
Homes using natural gas for heat will pay an average of about $679. That is about 13 percent higher than a year ago, but still 4 percent below the average for the previous five winters. Homes relying on electricity for heat, about 38 percent nationwide, will likely pay about 2 percent more for heat compared with last year.
For heating oil customers, there is good news and bad news in the U.S. Energy Department's annual outlook for heating costs. Their average bill should drop 2 percent, to $2,046. But that's still the second-highest average on record, behind last year's $2,092.
And some analysts are concerned about a potential spike in heating oil prices. That's because the fuels that refiners make alongside heating oil, including diesel and jet fuel, are in high demand around the world and inventories are low.
"If there's one type of product that could catch fire and go higher, it's heating oil," said Tom Kloza, chief oil analyst at the Oil Price Information Service and GasBuddy.com.
Natural gas should average $11 per thousand cubic feet, the government said. That's the highest price since the fuel averaged nearly $13 per thousand cubic feet in the winter of 2008-09, but 4 percent below the five-year average.
Michael West, director of corporate communications for UIL Holdings of Connecticut, which owns the Berkshire Gas Co., said increases in the prices for natural gas are not something that his company can control.
Berkshire Gas is a distributor of natural gas, not a supplier. In Massachusetts, the distribution rates are set by the state Department of Public Utilities before the home heating season begins.
"A commodity is a commodity," West said. "It's not something that we can control. When you compare [natural gas] to oil, we're still significantly cheaper.
"We feel we have plenty of supply for the winter already, and are ready to serve our customers."
Just more than half of U.S. households use natural gas for heating. Only 6 percent use heating oil, but those homes tend to be in New England and New York, where winter heating needs are high. Most of the 38 percent of U.S. households that use electric heat are in warm regions where heating demand is low.
Priscilla Ress, a spokeswoman for the Western Massachusetts Electric Co., said only about 10 percent of its residential customers use electricity to heat their homes.
She said those customers, and as well as those who use electricity for other purposes, will not see a spike in the cost of their power.
As a regulated distribution company, WMECO purchases electricity from suppliers and passes the cost directly to customers on the company's basic service supply rate, with no profit to WMECO, according to the company.
By law, WMECO's basic service supply rate for residential customers changes twice each year, on July 1 and Jan. 1. That means residential customers will be paying a different rate during the latter half of the winter than they will before the holidays.
"While it's possible that a spike in the fuels used to generate electricity could have an effect on the price we charge after January 1, it's too soon to predict," Ress said in a statement.
While WMECO can't control the cost that it pays its suppliers for electricity, Ress said the company can help customers reduce the amount of energy they use by making their residences more energy efficient.
WMECO provides no-cost, in-home energy assessments to its customers. WMECO customers can also qualify for a weatherization incentive of 75 percent up to $2,000, or visit the Mass Save website and talk to an energy-efficiency consultant to learn more about these no-cost assessments.
Mark Wolfe, executive director of the National Energy Assistance Directors Association, which advocates for heating assistance for low-income families, worries that high heating oil prices, colder weather, and cuts in federal heating assistance will leave more families vulnerable.
"Two years ago, we could help close to 2 million more families than we can now," Wolfe said.
In 2010, Congress set aside $5.1 billion for heating assistance. This year, Wolfe is expecting $3 billion.
"There's no ability to respond to spikes in prices," he said. "If this winter is really cold, it won't be adequate."
The Energy Department expects temperatures in the Northeast to be about 3 percent colder than a year ago, resulting in a 3 percent increase in consumption of heating oil. Bills will be lower, however, because the average price for heating oil is expected to drop.
But the government cautions that if temperatures are about 10 percent below expectations nationally, heating oil costs could rise around 9 percent from a year ago. That would mean an average bill of $2,280, a record.
Material from The Associated Press was used in this report.
To reach Tony Dobrowolski:
or (413) 496-6224
On Twitter: @tonydobrow
At a glance ...
In Massachusetts, the state Executive Office of Energy and Environmental Affairs has following data on the average cost of fuel:
Per gallon 2012-13 total 2013-14 estimate Change
$3.82 $3,136.25 $3,140 +0.12 percent
$3.37 $2,650.36 $2,975 +12.3 percent
$1.19 a gallon $1,180.96 $1,219.75 +3.3 percent