Oil: Pre-buy This Year or Not

velvetfoot, I pretty much rate oil like real-estate. It goes up and down but will always in the long run it will continue to go up. I think your main issue is the volume you would be using to make it worth while to switch suppliers ect. Iam hoping for you since you are on this forum, that you burn wood and one fill-up should do you this season if this question is related to heating your home. I have been quite surprised how much of the southern people require to heat their homes. The old colonial style must be the main culprit. Iam paying $5.50 a gallon now and burn 250 litre's a year witch is approx 55.5 imp gallons.
My opinion on the price of oil is Burn wood and insulate. :coolsmile:

I guess it would depend on how much oil you have in the tank and how much wood you have stockpiled. I fully expect the price of gas and oil to go down ...way down.

imo the high prices of today are a planned economic assault on our economy as a result of our 50 years foreign policy regarding Israel. . Do you you think it was as accident or happenstance that the arabs drew 1st blood at the WTC? It's a planned strategy against the US called "defeat by details".

Now the Arabs don't want to live in a world controlled by the Soviets or the Chinese ...but they do want us to know what azz we should be kissing. Therefore, if I'm right, the price of oil will crater to the 2.25 per gallon before Christmas...so if you have enough to hold out until then...do so.

2.25 a Gallon by Christmas?? Make that a sticky.

I predict lower oil this heating system - my opinion only, although I have put some money where my mouth is (DUG).

Even if the oil futures drop back to $82/barrel, I don't see gas-at-the-pump dropping below $2.75. Americans have already mentally adjusted to expensive gas in terms of shelling out more cash for it, but have not adjusted their driving styles or shopping/errand habits.

People still jack-rabbit stop and start, and still run to Wallyworld, then come home, then go out to McCluck's for dinner, and come home, wash, rinse, repeat.

The current futures price should translate to about $3.51/gallon at the pump. I kind of feel like our floor is $3/gal. However, we saw driving demand drop for the first time ever recently... and we haven't yet seen what the rush to woodburning will do to fuel oil demand this winter. Maybe we can exert enough downward pressure to make a difference?

Although, as we add more detergents to the gas mix and blend in net-loss-ethanol... I guess you can expect some price support.

north of 60 said:

...I pretty much rate oil like real-estate. It goes up and down but will always in the long run it will continue to go up...

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Well, except for the fact that real estate will always pretty much be here (although undoubtedly in altered form) until the Earth vaporizes as the Sun dies a few billion years from now...whereas oil is a scarce resource which is being used up at a mind-boggling rate, and it will be long gone way before the real estate is. Rick

well in this volatile market wholesale spot price as of today dropped to $3.69 or so which means around $4.29 retail delivered or so. So its anyone's guess as to what will happen. IMO, a lot of this price drop is attributed to the easing of tensions with the first ever US diplomatic talks with Iran this weekend. If the meeting goes well, we could see more price drops. If a shooting war breaks out later this year, there is no limit as to how high oil could go.

I just spoke with the oil company, and the offer is now $4.69/gal if I pre-buy, or $5.14/gal price portected, so you pay the lesser of cash price or $4.79/gal. The other 35 cents is the fee per gallon for the price cap. I think I will wait this one out, and take my chances on straight up cash prices for this winter. I think I will be able to contain my usage to 400 gals, which is mostly hot water.

We need someone to invent/produce a hydrogen producing module that will provide the fuel to heat the house and run the car! Bring on the Hydrogen!! Until then, I'll be out back stacking wood.

-Sheepdog

Pre-buys are things you do in MARCH :/

At this point, you're probably better off rolling the dice and buying at the cheapest possible price each time you need the tank filled. The guarantees and caps are all way above the likely winter price of oil, from what I've seen, so it would have to go up quite a bit to make a fixed-price plan a big win. That said, a pre-buy at current prices wouldn't be a big mistake either (though I think a cap plan would be)

There's also a reasonable chance that (in the US) people will cut back on their overall heating oil use due to the cost, keeping the price from getting too too high.

Let's not forget what huricane season can do for the price of oil.

I just received my pre-buy price from my oil dealer, $4.66 with a downside protection option of $.25/gal. No thanks. I'll take my chances with buring wood and using less. I agree with the others who believe that oil will be lower come winter. Just based on an unscientific sampling of recent conversations with people, demand will be down and the prices are already inflated. Quite a few people I know have already taken steps to augment their oil heat with alternative sources. That being said I've bet the wrong way each of the last two years.

fossil said:

north of 60 said:

...I pretty much rate oil like real-estate. It goes up and down but will always in the long run it will continue to go up...

Click to expand...

Well, except for the fact that real estate will always pretty much be here (although undoubtedly in altered form) until the Earth vaporizes as the Sun dies a few billion years from now...whereas oil is a scarce resource which is being used up at a mind-boggling rate, and it will be long gone way before the real estate is. Rick

Click to expand...

I guess I should of said I COMPARE oil PRICES like real estate PRICES. Im pretty sure the last gallon of oil on earth will be worth more than $5
Quit nit pic-ken Fossil :-/ Thought you were PooK, Koop, For a second. VAPORIZE :lol:
Hope Im wrong with oil prices, but just cant see it. It wont drop like the price of full size trucks lately thats for sure.

north of 60 said:

...Quit nit pic-ken Fossil :-/

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Well, then what the heck am I gonna do with myself? Take off to the great white North, ya hoser!. Oh, wait, you already did that. :cheese: Rick

Well, then what the heck am I gonna do with myself?

Click to expand...

Now that's a scarey scenario, and I ain't been here that long.

*sweet smile*

Jay777 said:

Pre-buys are things you do in MARCH :/

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If only that were possible. We won't see pre-buy or budget lock rates for another month around here, they usually send the letter out in mid August and your payment is due Sept 1st.

Thats assuming the oil suppliers even offer anything except pay as you go.

savageactor7 said:

I guess it would depend on how much oil you have in the tank and how much wood you have stockpiled. I fully expect the price of gas and oil to go down ...way down.

imo the high prices of today are a planned economic assault on our economy as a result of our 50 years foreign policy regarding Israel. . Do you you think it was as accident or happenstance that the arabs drew 1st blood at the WTC? It's a planned strategy against the US called "defeat by details".

Now the Arabs don't want to live in a world controlled by the Soviets or the Chinese ...but they do want us to know what azz we should be kissing. Therefore, if I'm right, the price of oil will crater to the 2.25 per gallon before Christmas...so if you have enough to hold out until then...do so.

Click to expand...

It wouldn't surprise me. There is really no substance behind the current high prices. There is some substance IMO to the economic warfare theory. Just think of what it would do to their profits if US reduced usage by 2%? Demand is decreasing, therefore price sooner or later, will go down. It can go down as furiously as it went up. It was not long ago...1999 to be exact, that gas was under $1 per gallon. Clinton did that for us! Just kidding

In realistic terms (if there was such a thing), $3 a gallon seems to be the proper price for now.......based on value, etc. - but once panic sets in, there is no limit.

I used to pay ahead!but when i saw the last promotion for pre pay starting at $2500!just not rich enough to live that lifestyle.This will be my first year with the wood stove going all winter and hoping that my wood supply (most cut from my land,seasoned 1 yr)will be enough to just buy a min amount of oil for hot water and alittle home heating.

I'm lucky to have found a local dealer with a big storage tank.. they literally pre-buy your pre-buy (in March/April).

mayhem said:

Jay777 said:

Pre-buys are things you do in MARCH :/

Click to expand...

If only that were possible. We won't see pre-buy or budget lock rates for another month around here, they usually send the letter out in mid August and your payment is due Sept 1st.

Thats assuming the oil suppliers even offer anything except pay as you go.

Click to expand...

Same here in Vermont. A lot of them are saying they won't have pre-buys this year at all. Personally, I'm going to take my chances this year. From everything I read/hear, the price of fuel oil should go down a good bit, though not even to last year's horrendous price, by the time winter heating season really gets going.

velvetfoot said:

Intuitively, worldwide demand has gotta be up.

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It is, and it's only rising, and very rapidly. Suspicion is the Saudis are seeing the signs from their fields they're starting the long, slow process of running out. The supply of cheaply obtainable oil in the ground is finite. Look up "peak oil" sometime if you want to scare yourself to death. Some think it's already here. What we've seen over the last year has been a big spike run-up due primarily to speculation, and it should fall back again. But there's no escape from steadily rising oil prices. We'll be back at this price in a year or two and it won't ever go back down, is my understanding.

Man, I thought that "hot water on demand" off my oil-fired boiler was a great idea when I had it put in. Bad guess. Can't even get an electric hot water tank put in anytime soon around here right now, they're in such demand.