As the head of operations for Approved Oil Company for 30 years, I would like to consider myself an expert in the oil market who has been lucky. And calling someone an expert in the energy market is a pretty hard name to live up to. My advice to building managers, owners and board members is to communicate with their dealer on a weekly basis and pick their brain as much as possible. If a building can stay within twenty percent of heating costs from the year before, it is not that bad. There a few things some of my customers are doing to protect their product. Some are purchasing half their usage at a fixed price as others are protecting the product with a variable rate with a fuel cap. Some of them are avoiding a fixed rate and going with just a fuel cap. With the market so volatile they are afraid to float and be left unprotected. If the market does drop due to mild weather or an over abundance in product the price will drop. The market for the last three years has been the most unpredictable market I have ever seen. My concern right now is that if the spill in the Gulf is not cleaned up by October, oil will be over a hundred dollars a barrel. Another concern is hurricane season whether or not it hits the refineries it will generally drive up the cost of the barrel regardless.
Quite possibly the next good buy will be in mid July to early August. Another variable that affects this market is civil unrest in foreign countries. We can thank the speculators for this. This is just one of the many variables to drive the price of oil up. Even countries that are not oil producers can drive the price of oil upward. Depending upon how much fuel the President and Congress decide they want to keep in reserve, will also drive the price upwards. Last year there were seven hundred million barrels in reserves. To heat the entire Northeast we need about four hundred and fifty barrels. We have an oversupply in reserve. Very few know that the United States is the second largest oil producing nation in the world. Another possibility of buying product may come after election day; this is another reason to stay in touch with your dealer.
Today's fuel saving tips: Install a seven day digital thermostat and save up to five percent. You can also lower your temperature two degrees and pick up another three to five percent savings. If you own a building that has sixteen families or more I would advise upgrading your heat timer and the cost of the heat timer will pay for itself in the first year. If you have any questions on buying fuel with absolutely no obligation please do not hesitate to call. My expert advice is free.
Larry Collins is head of operations and director of sales for Approved Oil Company, New York, N.Y. Tags: