Analysis of heating fuel market behavior, 1989-1990. Final report to the Senate Governmental Affairs Committee and the House Subcommittee on Energy and Power

摘要

The purpose of this report is to fully assess the heating fuel crisis from a broader and longer-term perspective. Using EIA final, monthly data, in conjunction with credible information from non-government sources, the pricing phenomena exhibited by heating fuels in late December 1989 and early January 1990 are described and evaluated in more detail and more accurately than in the interim report. Additionally, data through February 1990 (and, in some cases, preliminary figures for March) make it possible to assess the market impact of movements in prices and supplies over the heating season as a whole. Finally, the longer time frame and the availability of quarterly reports filed with the Securities and Exchange Commission make it possible to weigh the impact of revenue gains in December and January on overall profits over the two winter quarters. Some of the major, related issues raised during the House and Senate hearings in January concerned the structure of heating fuel markets and the degree to which changes in this structure over the last decade may have influenced the behavior and financial performance of market participants. Have these markets become more concentrated. Was collusion or market manipulation behind December's rising prices. Did these, or other, factors permit suppliers to realize excessive profits. What additional costs were incurred by consumers as a result of such forces. These questions, and others, are addressed in the course of this report.