Locking in Heating Oil?
September 15, 2016 3:08 PM   Subscribe

Hello, prognosticators and speculators! Look into your oily, viscous crystal tarball. With crude oil at $43.76 per barrel today, and an email in my inbox from MassEnergy (of which I am a member) informing me of a webinar I won't be awake for, I'm wondering: should I lock in my heating oil price while it's still warm out? If so, what's good timing? I expect to use 350 gallons of oil this year. I'm in MA, about 10 miles west of Boston Harbor.
[previously from 2008, when oil was $98/barrel ... paging mjjj, how did it go?]
posted by not_on_display to Shopping (5 answers total) 2 users marked this as a favorite
 
I'm no expert, but it seems pretty unlikely that prices would go significantly lower than they are now. I've heard stocks are pretty high, so prices may hold steady. On the other hand, if it's unusually cold or if unexpected events constrict the supply, prices could certainly rise substantially. So, if I had an opportunity to lock in the price I would probably go for it.
posted by jkent at 4:39 PM on September 15, 2016 [1 favorite]


It's not possible to predict prices ahead of time. The market's best guess as to future conditions is built into the existing price. Future movements will be based on information the market doesn't have yet.

If you're doing this via the nonprofit you linked to, you'll get a fair deal on the contract, so by all means, go for it. You may or may not get an advantage from locking in. This will make it to that you won't be worrying about the price going up on you. It's like buying a bit of insurance on the price you'll pay.
posted by thenormshow at 6:10 PM on September 15, 2016 [2 favorites]


I am not an oil speculator, I am not your speculator.

The US stopped shale oil production when prices fell below $60. The fracking industry has now said that they will be back online if oil crosses above mid-$40/barrel.

That, plus stocks are high like jkent says. My hunch says prices will float through the mid-$40s through the election. Higher prices will open the floodgates, pushing prices back down.

I'd lock in now, then forget about it for the rest of the season.
posted by JoeZydeco at 6:32 PM on September 15, 2016


Oh, right, it's annual Upset Stomach Over Heating Oil Price Contract Time again! (Though JoeZydeco probably has the right answer this year.)

We solved this by moving to a house with gas heat. *shrug*

But for the previous ten years our usual calculus was to figure out what we thought the most we could afford was, and to see how that compared with previous years' use rates (save your old fill-up receipts!) and also our worst fears about pricing, which was based mostly on Department of Energy Monthly Use Report emails and some plain ol' fear.

Reader, we guessed wrong every damn time.
posted by wenestvedt at 7:20 PM on September 15, 2016


I talked to my oil salesman, who basically said that I couldn't lock in while keeping the MassEnergy discount (which has been a significant discount), so this question is now marked as resolved. Oil salesman agreed, though, that if I weren't on MassEnergy (whom they don't have a "locked-in" contract with), it would have been a good idea.

If this weren't the case, I would have locked in today and received a price which would have equaled approx. the average of what I paid last year over three tank fills. Maybe a little less. But without the discount? No.

(Oil salesman agreed that if I weren't on MassEnergy (whom they don't have a "locked-in" contract with), it would have been a good idea.)

Thanks, everyone!!
posted by not_on_display at 12:37 PM on September 16, 2016


« Older Freelance to full-time: how to prepare   |   Cats are not like dogs that poop in a box. Newer »
This thread is closed to new comments.