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January 10, 2009
oil prices
I'd like to get a better understanding of heating oil (#2) prices and how they match crude oil. Been looking at oil charts to see how the barrel prices are relate to my prices, but not sure how the timing plays out, etc. Paid around $2.08 beginning of Dec, and lately $2.21. I'm on a contract so I figure I'm paying about 50 cents more than crude?
What prices are the rest of you seeing?
Comments
I know this is not what you asked, but I am curious as to what company you use as the prices I am paying are much higher.
Posted by: sjb at January 10, 2009 4:02 PM
I use approved oil. My old boiler shut off again today not long after getting an oil delivery (an hour or 2 later), and this is the 2nd or 3rd time that's happened. Don't know if it's coincidence or what. Right now boiler will turn on but not fire. Last time I got a new transformer for the same problem, we'll see what it is going to be this time.
As for Approved, they were the only ones I could find that would bother to get the boiler running in the first place. Now that it works, I'm on the fence about it. Understand that the boiler's been in bad shape for a while, but then again I believe the maintenance should be more thorough. It seems like they do the quick-fix, and then I have to call a couple weeks later for another problem or the same one all over again. Hard to say if it's just time for a new boiler or not.
What company do you use? How much higher are the prices?
Posted by: townhouser at January 10, 2009 4:24 PM
I am paying 2.99 and that is after pleading with my company to let me out of my contract for 3.99. That was very nice of them and that is why I stay with them - Statewide. They are always pleasant, accommodating, honest and reliable.
Posted by: sjb at January 10, 2009 5:33 PM
The heat crack, or the differential of heating oil to crude oil, is trading at a premium of 20 dollars a barrel. For a gallon, devide by 42 (42 gallons a barrel) and you get approximately 48 cents premium a gallon to crude oil (before taxes). Crude oil is quoted per barrel, so you need to divide crude oil price by 42 to get the gallon price equivalent. Heating oil is doing something extremely different in the markets than natural gas which is cheaper. Heating oil has been pretty expensive relative to crude oil due to strong demand for middle distillates, which include products of similiar specifications such as jet fuel, diesel, kerosine. This has been exacerbated by recent cut backs of natural gas by Russians in Europe, causing people to look to heating oil and kerosine to use for heating throughout Europe. Heating oil is traded internationally as is crude and the Russian problem has spiked heating oil here relative to crude.
Posted by: donatella at January 11, 2009 3:23 AM
I should have also said that heating oil trades on the New York Mercantile Exchange, symbol HO. Crude oil trades as well, symbol is CL. This is how you determine heat crack quotes in cents. Take nearby month, in this case February for both contracts. Take crude oil price and divide by 42, which makes converts the quote to gallons. Then take heating oil price and subtract the crude price converted to gallons. This will be your approximate premium to crude oil. As you can see, the current price I quoted above is close to your price. The smaller distributors buy on a spot basis in the cash heating oil market, but the bigger guys all trade on the NYMEX to lock in prices and differentials -- i.e. companies like Petro.
Posted by: donatella at January 11, 2009 3:29 AM
Oh and February symbol is G. So in the WSJ, the crude oil price is CLG9 and heating oil HOG9.
Posted by: donatella at January 11, 2009 3:30 AM
thank you, donatella -- very thorough explanation!
Posted by: townhouser at January 11, 2009 9:19 AM
You're welcome. I watch these spreads as well as other things all day long. Amazingly, the gasoline crack, or the differential of gasoline to crude, has spent several months trading at a DISCOUNT to crude. Demand dropped off so much for gasoline in relationship to middle distillates (which include heating oil) that refineries were cranking out heating oil to meet the demand and gasoline was a biproduct, which was in massive oversupply, thereby trading at a discount to the feedstock. Very wierd market, but anyhow so are a lot of things in this brave new world. You might consider looking into natural gas because the prospects for that in the longer term should be much cheaper than heating oil. Good luck.
Posted by: donatella at January 11, 2009 1:29 PM
Paid $2.69 on my last 260 gallons delivery. I figure my delivery guy takes about 50-75 cent premium for the delivery and the maintenance he does at each delivery for free. 50c on 260 gallons, that's $130 dollars. Seems fair to me for delivery and maintenance.
I use Scarlino Oil.
Posted by: brownie77 at January 11, 2009 1:31 PM
Sounds like everytime you get new oil put into the tank you still up the dirt and filth which settles to the bottom of the tank over time. There should be a clogged filter somewhere. make sure you keep it clean at all times. Find out how clean your tanks are.
Posted by: hannible at January 12, 2009 8:44 AM
turns out I dont even have a filter!
realized this the other day -- just can't believe that after numerous no-heat calls and 2 "cleanings", nobody mentioned anything to me. How hard would it have been to say that I might want a filter?
Stupidly I assumed I had one all along. I checked specifically for it the other day and didn't see one, neither by the tank nor the oil feed line to the boiler.
With automatic oil delivery, the boiler can be running and so sucking in all the newly turned up sludge -- also my problem turns out to be extra water coming in from the outside fill hole, which isn't sealed properly anymore.
I am tired of waiting for them to fix things piece by piece here...
Posted by: townhouser at January 12, 2009 2:31 PM
2nd Scarlino Oil -- excellent service! Not sure what current price is, it's been a few weeks.
Posted by: genya at January 12, 2009 10:23 PM
I use approved oil. I paid 2.05/gal two weeks ago. My boiler also stopped working right after oil delivery. Aparently the delivery added 1 liter of watery substance to the oil, which clogged up the filter. Replacing filter and dumping water from the bottom of the tank solved the issue.
Posted by: bobjohn at January 12, 2009 11:20 PM
bobjohn -- how did you find out for sure that delivery added this to your oil? Can you prove it? This is the second or third time delivery has caused problems for me, and I wish I could do something about it.
I think their prices are somewhat funny, too -- they check your account or address before they give a price. last week in dec I paid $2.22.
Even though I have automatic delivery (I have to change this soon), I happened to be there when they came, and I watched them. The guy seemed so uncomfortable, somehow...kept looking at the house and checking everything out, probably thought no one was home. He also didn't leave the pink slip so I could know how much oil they added.
Now, I'm still struggling with my boiler shutting off and not being able to fire properly because of this. And, since I don't even have a filter, who knows what this is doing to my poor boiler. Yesterday they were supposed to come, but I waited all day to find out they didn't put in the call. Luckily I managed to get some water/gunk out by disconnecting the oil feed line at the boiler. (completely faking what I learned by watching the guy who came last time!) and it started running, but not well, and turned off last night again.
How exactly did you get the water out of the bottom of the tank?
Posted by: townhouser at January 13, 2009 8:25 AM
Donatella, What an excellent and easy to follow description of the crack spread.
Those type of comments that make this website useful despite the dross that sometimes fills up a thread.
Posted by: Boerumresident at January 13, 2009 9:22 AM
On January 2008 my #2 oil was 2.97 per gallon, December 2008 it was 1.79 and today it 2.10 based on 150 gallons. I use 3 different oil companies and price before I order usually I use the lowest price as my average use is 300 gallons per month or 150 gallons every 15 days. This time I asked why the big jump in price and they said because of the war in Gaza. As far as I know there is no oil in Israel or Gaza so I believe that they are factoring in profit for the oil companies.
Posted by: momo284 at January 13, 2009 11:43 AM
Thank you, Boerumresident. I have gotten so much help on Brownstoner, that I keep coming back, despite the fact that it does feel like a walk through a garbage dump at times.
Posted by: donatella at January 13, 2009 1:22 PM
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