Bob Slaughter, National Petrochemical and Refiners Association president, on Wednesday told reporters in Washington D.C. the United States was "going to be rough" to find heating oil to import this winter.

He said the US may find some heating oil shipments from South America, but he did not think Europe or Russia -- traditional exporters of fuel to the US market -- would be able to supply much.

"It's never terribly easy to find heating oil imports," he said Thursday. "The distillate market has been tight all year."

LOW EUROPEAN INVENTORIES

The most recent data from industry monitors Euroilstock showed European distillate stocks much lower than a year ago due to growing diesel and jet fuel demand, even though supplies rose by 0.5 percent in August verses July.

Stocks of distillates -- diesel, heating oil and jet -- rose by 1.8 million barrels last month versus July, but were 9.34 million barrels, or 2.5 percent, below August 2004 levels, the Sept. 9 report from Euroilstock showed. The next snapshot will arrive next Tuesday.

International Energy Agency data showed jet and kerosene use in Europe rising by 60,000 barrels per day in the first half of this year compared with the first half of 2004. Heating oil and diesel demand also rose by 70,000 bpd over the same period.

In the United States, the effects of hurricanes Katrina and Rita have pushed refinery use to the lowest on record, below 70 percent, at a time of the year suppliers typically build up inventories for the winter heating season.

Heating oil stocks showed a small 400,000-barrel gain in the most recent weekly data, putting stocks 5.9 million ahead of the year ago period, the US Energy Information Administration said Wednesday.

"To the extent that we're dependent on imports, the low refinery utilization just makes the need to keep imports coming that much more important," said Refco energy analyst Marshall Steeves.

In the week to Sept. 30, gasoline imports hit a record and distillate imports were up 68 percent at 310,000 barrels per day, EIA said.

FRENCH LABOR STRIFE

"The problem would be if you get some early cold weather with Europe's already low inventories, there isn't much demand kill from high prices and the French labor problems have hurt production right at the time they would be stocking up on heating oil," said Mike Fitzpatrick, vice president for energy risk management at Fimat USA.

Strikes have kept France's largest refinery, Total's 328,000-bpd Gonfreville plant, shut since last week. A port strike in the south of France has blockaded crude supplies and products exports to and from about 600,000-bpd of refining capacity in the Fos-Lavera oil and petrochemical hub.

Meanwhile, the United States may be facing a winter chill.

Of four private forecasters surveyed by Reuters last week, all but one are predicting a colder-than-normal winter for the major energy consuming areas on the US East Coast, and in particular, the Northeast.

"The unanswered question is what demand is going to be going forward. Demand is going to depend on the weather, but there has to be some kind of conservation response, however limited, to the high prices," NPRA's Slaughter said.

The world's big consumers are feeling the pain. The European Commission forecast euro zone economic growth could slow in 2005 and noted risks from expensive oil.

"I am struck that there is some demand destruction related to both high prices and logistic constraints," Claude Mandil, head of the International Energy Agency, told Reuters.

The Paris-based organization, adviser to the world's industrialized countries, has already launched one global release of emergency reserves this year -- the first in over a decade -- and is on standby to do so again.

In the United States prices have also shown signs of hitting oil demand, with EIA data showing US gasoline demand down 2.6 percent in the last four weeks compared to the same period in 2004. Distillate demand was down 3.8 percent.