Looking Ahead to Heating Costs

October 26, 2011
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We have come to the moment in time every year when we finally turn on the heat to beat the cold that becomes pervasive inside our homes. The weather has changed. You better have oil in your tank or gas coming through the line into your home or it is going to get pretty cold.

The damning thing about having oil heat is that it is going to be cold in your home even if you have oil in the tank because the price for home heating oil is so outrageously expensive that one can’t afford to simply turn on the heat and leave it running.

With oil already in the $3.50 per gallon or a higher range, everything appears set for a $4 a gallon oil heating season. This means that if you have a 200 gallon tank, one fill will cost you $800.

Compare that to the price for natural gas, which is about 50% cheaper than oil.

Your local oil dealer isn’t responsible for this problem.

The responsibility lies with the speculators on the commodities markets around the world and on Wall Street. The price for oil today has very little to do with supply and demand. It has much more to do with rampant speculation, which goes on unfettered by the US government.

There has not been an instance in the past 30 years of there being a single retail supplier of oil running out of oil or being unable to find oil in the marketplace in abundance. So the supply and demand argument is rubbish for there is plenty of supply even though there is winter style demand at this time of year.

Your oil dealer is simply passing on the cost of speculation to you the consumer. Your oil dealer would rather be selling you oil at $2.00 a gallon instead of $4.00 a gallon because 9 out of 10 consumers cannot afford $4.00 a gallon heating oil and $800 fill-ups.