I’m not looking for an different heating source JOD…I don’t want a heat pump, and I can’t access natural gas.
I want to know what others around the country are seeing for costs of heating fuel oil. That is my question.
Assuming you don’t have oil pipelines to your home, propane is similar to the oil in terms of delivery and storage, yet still better on cost and carbon, etc.
I was just wondering if you are concerned about cost had you considered the better alternatives.
For the last time, JustOneDad…I am asking about costs because I’d like to know what others are paying around the country…not because I want to switch.
If you would like to start a thread about various forms of home heating, and the like, be my guest…but that is not my question…so please stop high jacking this to your agenda.
Just got my price protection package in the mail. Lock in at $2.99 - so it can’t go above that but if it is lower I get that price. They also reduced my monthly payment to $208.00. It’s less than last year - which was a lot less than the years before - so it’s all good, imo.
Thanks Emily. My lock in was $2.69. Glad I did it.
This resembles a call option (or call option on a futures contract).
^ Except if the ppg goes below $2.99/gal I pay the lower price and that is when I would want to buy. If I bought a call option I wouldn’t want the price to go lower, I would want the price to go higher than $2.99. Thumpers plan buying at $2.69 is more like a call option. She “loses” if the price goes below $2.69 - the price she will buy all her oil at this year.
I’ll let you all know if the price of heating oil goes below $2.69 a gallon this winter. Right now, it is rising.
I priced out the plan that Emilybee has as well. Where I am, that type of plan also required purchase of some kind of “insurance” policy that basically negated any decrease in per gallon costs…unless there was a HUGE drop (like last year…when there was a huge drop…like over $1 a gallon).
If heating oil goes to $1.69 a gallon (a dollar less than I paid), I guess I’ll be kicking myself!
I don’t think you have anything to worry about this year. I don’t usually follow the price of oil on the market except when there is big sudden increase or decrease. The last thing I read (a few weeks ago) when the price started to rise was that there’s still a huge surplus but demand is decreasing and this rise is from a few things happening at once (forget what they were) but the long term outlook is for prices to stay low.
Here is article which says basically what I read several weeks ago.
http://www.usatoday.com/story/money/2015/05/23/oil-prices-could-hit-a-summer-slump/27323689/
Actually, thumper’s plan where she is obligated to buy at a given price is like a futures contract. Your plan where you have the option to buy at a given price, but are not required to buy at that price, is like an option contract.
It’s not an option to buy at the price - that is the price I am guaranteed to not have to go over if price goes higher. If it goes lower, I get to buy at the lower price. If I was buying an option I would want the price to always be higher when I exercise it, no? So, I would want to buy options on pork bellies, for example at $25 and sell when they are worth $50, no? That would be how I make money. With my oil, I want the ppg to go lower than $2.99/gal and to buy at the lower price.
One also doesn’t have the option with oil to buy it when you decide to. You have to buy it when you need the oil - regardless of the price at the time.
That would be true if you were buying a tradeable option on the financial markets, so that you can sell the option at a higher price if the underlying thing rises in price above the strike price. Here, you are buying an insurance policy against something going up beyond the strike price, which is another way of using an option. Of course, if the price is lower than the strike price, you won’t have any gain from the option (insurance) premium.
Unless you can buy now and store it until you need it.
If you make a contract to buy in the future at a given price, it is like a futures contract. If you have the option to buy in the future at a given price, it is like an option on a futures contract.
But I would gain if the price goes lower. I’d rather buy at $2:50/gal than $2.99/gal. Also, the monthly amount I have to pay my oil company gets readjusted if the ppg goes considerably lower. Last year my monthly went from $275/month to $215/month.
“Unless you can buy now and store it until you need it.”
I live in the northeast. There isn’t a residential tank big enough to hold a years worth of oil.
My cousin, OTOH, who owns a heating oil company (was my grandfather and his brothers & sisters businesses) gets to buy when the price is low and can sell it when the price goes high. That is how he makes money. I assume he buys futures but also, obviously, has storage facilities.
Out of curiosity what temperature do people keep the house at? This morning my heater came on in California for May, it’s a bit cold so I asked my husband and he said he set it to 72 degree. Is that unusual?
^ It is if you use oil. I keep mine set no higher than 68 in the dead of winter. Turn it down to between 62-64 at night. I turned of the thermostat completely about a month ago but did need it on the other night for a few hours to take the chill out . It was a damp day so I felt the cold. My furnace is never completely off as it’s how the hot water in my house is heated, too.
He sets the night temperature at 67 so it wouldn’t come on. In the day if he wants it any cozier he sets the temperature to 74. As he states out loud to me, we like to live comfortably. We pay between $12-$19 per month.
For that price it’s a no brainer to jack the heat up if that’s how you like it. I would be broiling if my house was 74 inside (and I would burn a lot more oil.) I live in upstate NY where it’s very cold in the winter but I find 68 to be perfect during the day when I’m home - except when it’s a damp cold (like 45 out and rainy.) On days like that I sometimes turn it to 70 - but only for a few hours. When it’s brutally cold out I keep my house even lower - like 65. That feels very warm when you’ve been outside in minus degree weather.
There are 1,000 gallon oil and kerosene tanks. Around here most of them are underground and some counties are requiring these underground tanks to be removed.
Every summer I would negotiate with a college professor to offer her a low price for 900 gallons of kerosene for her underground tank for the next winter. Oil companies like these one time deliveries, and typically charge the customer at only their cost plus 20 or 25 cents. Farmers are tough negotiators because they pay attention to both the market prices for fuel, and to what your competition is offering.
We almost put in a second oil tank when we built our house (oil tank is in the basement). If we had done so, we would have had enough oil for the full year.