On October 5, OPEC announced it was slashing production by two million barrels a day. Within just three days, our suppliers had increased the cost of heating oil by 70 cents per gallon. That’s right, 70 cents per gallon. Ridiculous!!
This is not just impacting heating oil. Expect natural gas, electricity, and gasoline to move higher too (fortunately, propane has not moved nearly as high this entire year.) Of course, this is not simply about supply and demand. We’ve learned that when prices move this far, this fast, you can always see the fingerprints of Wall Street firms that jump in to take advantage of the momentum to make a quick buck (or should we say millions of bucks.) It frustrates the heck out of us.
Of course, things can turn around just as quickly. We saw prices spike in spring only to drop by over a dollar in summer. We are hoping for the best, but there are just too many variables to know where things will go from here.
I will try to keep you informed as events unfold. There are many things we can’t control. But we will always prioritize our existing customers over new ones. We will go the extra mile to keep you safe and warm. And we will be there when you need us.
Posted: May 26, 2022
We know many of you are looking at energy cost increases and wondering when this will end, and we don’t blame you. Our goal is to keep you in the loop as much as possible, even though the situation remains very fluid.
Last week, our suppliers again raised prices by more than 65 cents per gallon over a few days. The reasons are complicated and seem to be affecting heating oil and diesel fuel much more than gasoline.
The driving factor is that heating oil in our area is in short supply now. In fact, if you look at prices on the commodities exchanges, they show heating oil at a dollar less than we can get it! That never happens. It’s called “basis blowout” and reflects a disconnect between the markets and actual supplies.
The good news is that the supply issues are happening because the markets expect heating oil prices to go lower by a fair amount over the next several months. Fuel suppliers are reluctant to purchase fuel now and get stuck with higher-priced product. The bad news is that it is causing prices to be artificially higher now, and no one really knows for sure what will happen with the Ukraine war. By the way, we are seeing the same kind of surges in natural gas and electric costs.
We decided to hold off most deliveries except for those customers who seemed to be running low. It didn’t help that we’ve had an unusually cold spring, and people are still using their heat. Beyond that, we want to urge people to get on our budget billing program, which allows us to spread your fuel payments over 11 months. If prices stay high next year, it will be much easier to manage your bills if you don’t have to pay for all of your deliveries in just five months of fall and winter.
If you have any questions, don’t hesitate to call our office. We are here for you.
updated March 11, 2022
Unsurprisingly, we’ve been getting many calls around two connected issues: the surge in fuel prices and supply concerns. People are astounded by how much prices have risen and how fast. So are we. They are also concerned that there will be interruptions in supply that will cause them to run out of fuel.
The Russian invasion of Ukraine shocked energy markets, sending crude oil to record territory and spiking all energy prices. We’ve had increases from our heating oil suppliers of over $1.25 per gallon in less than a week. Propane prices have been better but still increased over 40 cents per gallon. And the situation remains very fluid.
We don’t know where things will go from here. One thing we can tell you is that we hate this as much as you do. Some people are under the misconception that when prices rise, we make more money. The opposite is true. People cut back usage. They have trouble paying their bills, and our receivables skyrocket. It is an awful mess for everyone.
One thing you can count on is that we will not let you run out. We have been in business for many years and have very strong relationships with suppliers and financial institutions. We are already getting calls from customers who are with other companies that can’t say the same. These customers are unable to get deliveries for 20 days out. You don’t have to worry about that with us.
If you are having trouble paying your bill, talk to us before it becomes a problem. Many times, we can work out something to give you more time, especially if you’ve been with us a while. We can also set you up on a monthly payment plan.
Nothing will make us happier than when prices start dropping. Until then, trust us to look out for you, and let’s pray for the people of Ukraine.