NY Natural Gas now $2 a therm; how's oil compare per BTU?

D107

These thoughts occur to me:

1- In terms of pure price, it would seem that the only time a cap price in a standard oil co. contract might be LOWER than that of an independent oil co. is when prices spike for whatever reason. (As they did after Katrina,etc or some Middle East event.) So the regular oil companies pay for insurance--which consumers partly pay for as well--to keep prices from skyrocketing. I'd be curious to hear from Phil etc how they did with their prices with the discount companies after Katrina or during other volatile moments in the market.

2. So with a standard oil agreement customer is paying for the price insurance, overhead of large company, service agreement, etc. Service agreement for any one customer could be a big money loser if something goes wrong with boiler, so one would think it's in the company's interest to maintain the system well. So if a customer pays 50¢ more a gallon for gas for a standard contract and uses 800 gallons of oil, that's $400 more, maybe $500 including the service agreement
then that MIGHT be considered justifiable insurance cost to cover system problems. It must cost at least $200 a year for annual setup even if there are no problems.

Each arrangement seems to have benefits; bottom line the customer has to feel confident about who's doing their service, and that compared to other similar agreements, the oil price is in the same ballpark. The oil storage strategy Constantin spoke about is brilliant--but of course most of us can't put 2 400 gallon tanks in the basement to ride us through the price spikes.

As for the natural gas 'de-regulation' I haven't seen any agreement with the so-called independent suppliers ('escos')
that is really going to save me alot of money as an individual resident. We did benefit ten years ago in the city with keyspan, but we were a commercial account (co-op) with 24 individual accounts--and we could have saved more if we had 'master metering.' Perhaps if an entire block or neighborhood banded together and negotiated as a unit there would be some leverage......

Thanks,

David

D107

news says storage is problem for gas though supply is good

Some commentator said that. Oil's about $2.50/gal? for 140K btus? that's about 1.7¢ per Kbtu. For natural gas, that's over 2¢ a Kbtu (all charges included based on 100Kbtu per therm?)
Oil 15% cheaper?

Interesting how gas bill claims cost is a little more than $1 a therm, but with all the charges it's almost exactly $2 this month.

Norm Harvey

All the little charges,.. "That's how they get cha!"

I like oil because its a product that I can buy, and monitor physically. I can shop around to different oil dealers to find the best price every time I need a delivery.

I see that gas pipe as a pipeline right into my wallet.

Downsides?
Can't mod/con with oil But I'm very happy with a 87% System 2k that only runs just as much as it needs to, or a multi pass Buderus or Viessmann with advanced controls to find just the amount of run time I need for my demand and not a second more.

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Constantin

Yup

Ms. Vitola may be oversized, but she works hard... sipping B5 oil at $2.2/gallon.

Onsite storage and a choice allows oil consumers to keep their providers a bit more honest than the gas company monopoly. My general contractor still cannot believe I went for a new oil system in 2004. I just looked at historical averages...

Steve Ebels_3

You poor beggars are getting the shaft

Here in Michigan, Consumers power territory, my last gas bill showed $.95/therm including all the extraeneous charges. Oil here is running about $2.25 per gl with LP going from $1.45 to $1.90.

Bernie Riddle_2

Just paid 1.99 a gal for heating oil here in South Central PA. I look for it to drop quite a bit here soon unless the weather gets bad in a hurry. I think all the oil companies are trying to hold the price at 2.00+ until they can move what they bought at the beginning of the winter and have been setting on. Oil has dropped quite a bit since the beginning of winter and its still at 2.00???

D107

I've never seen a clear explanation for heating oil pricing

When a new boiler was installed at the family house, we chose a cap program that could also go lower, as opposed to a fixed price which was in the middle of where the cap would be and where the market price was at the time. But nowhere in the contract did it say according to what system, timetable and mathematics would the price go down. Only that prices were set based on a journal of some kind that published daily price figures. I can understand that a company has to buy in advance, and then has to sell that off based on the higher price it paid for it before the next possibly cheaper inventory can be sold cheaper. But without a clear system that a customer can see and understand there is not way to know how arbitrary it all is. Whenever I ask for details on this 'system' I feel like I'm asking Houdini to reveal his master illusion.

David

Norm Harvey

If you can find a professional heating system service person, that does not sell fuel oil, you can buy as you need it from the discount oil dealer with a low price.

When I want to gamble I play craps, not buy oil futures. And when I do play craps,.. I play with the house!



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Constantin

Good Point, David.

At the end of summer, I was offered to lock in oil prices at $0.50/gallon higher than what I paid in the beginning of the winter. I'm thinking of calling in a week or two when I have more than 250 gallons of empty capacity and the recent price decreases start to trickle through.

That's the beauty of oil, you can store the stuff. Being able to time the market is yet another advantage of that fuel. Now if Viessmann could only release a multi-stage burner for Ms. Vitola in the US, I'd be all set.

Patchogue Phil_29

oil prices

I paid $1.939 a gallon Nov 25 2006. Today, I paid $1.839 gallon. May 5 2006, $2.299 gallon. This is for 200+ gallons a delivery, Long Island NY location.

scott w.

NYPSC

Unfortunatly for those living in New York, you have a state Public Service Commision that had or has a socialist/Communistic approach toward regulating their public utilities. They have so many regulations and hoops a utility must jump through it boggles the mind.

I think they have a seven story building in Albany just dedicated to regulating the telecommunications companies. Lord knows how many floors dedicated to the natural gas industry.

[Deleted User]

Ditto in Coloratto...

ME

RonWHC

Probably the Journal

of Commerce. No different from a variable rate mortgage or home equity loan. If the chosen index goes up, so will your monthly payments. If it goes down, you win.

That said; natural gas sales folks could teach used car sales types some lessons. First & foremost - you can sell your product w/o out ever having to reveal its true cost. How many consumers have the time, or mathematical acumen, to disect a gas bill? Balancing fee or peak charge anyone?

Robert O'Brien

Constantin

Don't take this the wrong way but if you or I could time the oil market we'd be trading on the Merc for obscene profits rather putting boilers in in my case or doing whatever you do all day for a living.

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D107

different oil prices

That's interesting Phil. At a LI location maybe 15 miles from you initial late October 06 delivery price was $2.369 246 gallons first fill--was told this price was a start-of-contract 'courtesy' price, lower than the real prevailing rate. Dec. 11 price for 123 gallons was $2.699. ????

Norm Harvey made a good point about getting oil from discount companies--perhaps without a long-term contract? Where does a consumer look for a discount company as opposed to one that has service deals, etc.

Thanks,

David

Constantin

No worries...

I'm not taking it the wrong way at all. I'm also not suggesting that I'm somehow clairvoyant. However, way back when I was making my decision about a heating plant for this house, I looked at the market, the historical averages for oil vs. gas costs, and made my decision based on those factors.

On average, the Boston area has "enjoyed" gas prices about 40% higher per BTU vs. oil for the last 20 years, IIRC. While oil prices had surged in 2004/2005 to the point of parity, I still saw no reason that the oil prices would not subside over time. So far, it looks like the 40% difference is re-asserting itself as the local gas prices continue to stay high while high stocks are finally causing a oil price tumble below $50/barrel.

Being able to take advantage of decreases in oil prices by stocking up via a large tank farm in the bsement is one thing I love about oil. If anything, I wish I could have fit two 400 gallon roths there instead of the 275's I have now. 800 gallons of storage would get me through an average winter with room to spare and allow me to pick and chose when to refill.

In the EU, 800-1000 gallon storage facilities are not uncommon and many homeowners have them refilled seasonally. I've also heard of oil suppliers giving homeowners a break if they band together and let's say 5-6 of them on one block buy from him/her. That makes refills less costly because the truck spend less time driving and more time filling.

Patchogue Phil_29

Discount oil

Look in those little "newspapers" you get in the mail with all the supermarket circulars that are stuffed inside.

"Pennysaver", "YankeeTrader", etc etc.

Try www.codfuel.com , but companies shown there are a bit higher than others found in the above mentioned "newspapers".

D107

Then how can you tell if co. is selling quality oil?

Since there's no contract and possibly no longterm relationship--sort of a singles bar--then company might be less motivated to do their best. What criteria do you use in choosing such a company to ensure getting quality oil?

Thanks,

David

Norm Harvey

How do I choose if the discount oil dealer I buy from is selling quality fuel oil?

I interview him. I talk to him, get a feel for his characeter, and ask him if he buys the permium fuel oil with the additives in it from his depots.

Same as with anything, if you look at his truck thats rusty, and his appearance unkept, that reflects on his business practices. The discount dealers I recomend to my customers are small, but professional companies with little overhead, like myself.



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John@Reliable_13

David,\"Then how can you tell if co. is selling quality oil\"?

The days of "the bottom of the tank" are long gone. All trucks that fill at the terminals pull from the same tanks regardless if they are one truck or 50 truck companys.With todays market prices and just in time deliverys oil is always fresh.

marc friedman

not to mention

NYS nat gas ....

is 50% tax

Glen

B5 -

Have you considered B100? At least for testing purposes? A Vitola would be the perfect platform - regardless of burner. Just curious if there would be significant combustion differences.

Maine Doug_52

I live

in a town with a tank farm with various products delivered by ship and barge.
All the dealers, brand names and discount pickup oil at the same spigot. Yet the prices vary.