Oil prices keep climbing in wake of OPEC cuts

Reuters News Service

LONDON - World oil prices climbed further today after a surprise OPEC decision to tighten oil supplies that analysts said will put the heat under crude markets this winter.

The above headline and lead paragraph of this Reuters News Service article is foreboding indeed. It reaffirms the fact that we are at not at all in control of our own destiny when it comes to fuel oil prices, and it clearly shows that there is little regard by foreign sources for our need to keep fuel oil prices at reasonable levels. :

"I am surprised that OPEC would reduce their output at a time when stocks are still substantially below historical norms and we are entering the high demand winter season in the northern hemisphere."

Mr. Mandil made the above statement in reaction to OPEC's (Organization of Petroleum Exporting Countries) decision to tighten oil supplies. What does it mean for the consumer of fuel oil...a spike in fuel oil prices? Almost a certainty. The ironic part about it is that virtually all of the fuel oil used for heating is a domestically processed, US middle distillate petroleum product. Consequently, one would think that outside influences would have no impact on fuel oil prices. Make no mistake about it...they do. Here are the major factors that affect fuel oil prices....

Seasonality in the demand for heating oil - When crude oil prices are stable, fuel oil prices tend to gradually rise in the winter months when demand is highest. However, at times, fuel oil prices can surge quickly to very high levels, as occurred in the winter of 2000. A homeowner in the Northeast might use 650-1000 gallons of fuel oil during a typical winter, while consuming very little during the rest of the year.

Changes in the cost of crude oil - As we've seen, the price of crude oil plays a major role in determining fuel oil prices. Crude oil prices are determined by worldwide supply and demand. Demand can vary worldwide due to several factors, including the economy, the weather and, of course, the Organization of Petroleum Exporting Countries (OPEC).

Competition in local markets - Competitive differences can be substantial between a locality with a limited number of suppliers or dealers of fuel oil versus an area with a large number of competitors. Consumers in remote or rural locations may face higher fuel oil prices because there are fewer competitors. This is one of the primary reasons for being a member of PriceEnergy!

Regional operating costs - Fuel oil prices are impacted by higher costs of transporting the product to remote locations. In addition, the cost of doing business by dealers can vary substantially depending on the area of the country in which the fuel oil companies are located. Costs of doing business could include wages and salaries, benefits, equipment, lease/rent, insurance, overhead, and state and local fees. Another area that PriceEnergy can help level the playing field!

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The good news for businesses and homes using fuel oil is that unlike natural gas and electricity, after a price spike, fuel oil prices will generally come down again, quite like the stock market. In fact, fuel oil has consistently outperformed other heating fuels, as stated by the following summary reports by the Energy Research Center, Inc., of Easton, Connecticut.

Residential natural gas and home heating fuel oil prices from 1980 to 2002 based on US Department of Energy publications:

• Over the past 5 years residential fuel oil prices have been 46% lower than gas
• Over the past 10 years fuel oil prices have been 45% lower than gas
• Over the past 15 years fuel oil prices have been 35% lower than gas

Average gas and fuel oil costs for a typical house in the Northeast US over the past 5, 10, and 15 years:

• Over the past 5 years fuel oil costs $917 a year, and gas costs $1,335 a year
• Over the past 10 years fuel oil costs $858 a year, and gas costs $1,240 a year
• Over the past 15 years fuel oil costs $854 a year, and gas costs $1,150 a year

Prices of residential natural gas and home heating fuel oil from 1980 to 2002 for a typical Northeast, US home:

• Fuel costs with natural gas have increased from $680 to $1,548 a year
• Oil costs have varied from a low of $721 to a high of $1,072 a year

It's apparent that PriceEnergy's system for purchasing fuel oil through economies of scale couldn't be any timelier. Let's take a look at some of the benefits of being a member....

Customer Benefits

• Group Buying Power
• PriceEnergy.com combines the buying power of thousands of businesses and households for fuel oils to find savings that no one individual could get.
• PriceEnergy does the shopping for you
• When it comes to fuel oil, lowest price is our watchword! Count on us to find the best combination of fuel oil prices and service and to make sure you're getting the most "bang for your buck" that's available when the fuel oil delivery trucks pull up for your fuel oil delivery.
• Tell a Friend Program
• For each referral of yours who signs-up with PriceEnergy.com, we will give you a $25 credit towards your next online fuel oil or home heating product purchase! It is our way of showing you our appreciation for telling others about the incredible deals you're getting on fuel oil prices.
• Largest Delivery Area
• We deliver home heating oil to residential and commercial customers in states throughout the northeast & Mid-Atlantic, including Massachusetts, Maine, New Hampshire, Rhode Island, Connecticut, New York, New Jersey and Pennsylvania. Get current home heating oil prices now for you zip code.

Special BJ's Wholesale Club Member Exclusive!

PriceEnergy is proud to announce that through a special deal worked out with BJ's Wholesale Club, members there can now receive...

• BJ's member special fuel oil prices
• Exclusive BJ's member phone number
• Online ordering 24/7/365 for BJ's members
• Access to your private account online, anytime!

With BJ's secure payment process, payment for your fuel oil delivery is arranged at the time of order using a credit card, debit card or paperless check, and is charged following delivery of your fuel oil.

Not home at the time the fuel oil delivery trucks arrive? No problem! You will receive a copy of the fuel oil delivery ticket for your records. Order and delivery confirmations will also be sent to you via email. In most cases, you will receive your fuel oil delivery the next business day after ordering, and always within 3 business days.

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