So it turns out the expert WERE right in predicting a big price drop a la 2008. Prices are finally catching up with supply and demand but it took the downfall of several European countries and the crash in value of the Euro to do it.
We welcome a new fuel dealer to Our Town Energy Alliance, Lampron energy of Gorham Maine. They cover western Maine and eastern New Hampshire. Presently, they have the best fixed pricing of any of our dealers at $2,599/gallon. Fielding Oil & Propane is next at $2.69/gallon. Incidentally I am happy to report that, Fielding's, who joined us last year has had the best rack plus pricing of any dealer over the last twelve months. Their $1.98 prebuy LAST YEAR was the also the best price of any dealer. Eastern was second at $1.999. Member comments have been uniformly high.
Eastern's Oil pre-buy was early; we bought at $2.79/gallon after the first big drop and when prices started moving upward again. Knowing that there was a 50/50 chance of the prices dropping again, we only bought half of what we planned. When we feel that prices have bottomed out we'll buy again and blend the second buy with the first. At current market, we hope the blended price will be in the $2.65 or under range. Actual price will depend on prices at the time we buy. All those who bought the oil at $2.79 will be set up at the new blended price and receive a credit for the difference.
Once again, for about the third year in a row, we are having problems coming to terms with Irving on price. Their pricing is currently running about 20¢ per gallon higher than Eastern's, 40¢ above Lampron's and is unacceptable. We hope that, as in past years, the will eventually pare down the price offered to us if we say no long enough. But we are concerned that if they don't move soon, we'll lose the current buying opportunity.
Tuesday, May 25, 2010
The Banks We Bailed Out Cheating Us??
As you know from our earlier posts, the market has been impossible to predict this spring due to speculation overriding the fundamentals of supply and demand. Goldman Sachs with 1.1 trillion in assets has led the charge in overpricing oil through speculation. Thus, I for one am not unhappy to see them get caught with their hand in the cookie jar, i.e. selling marginal equities to unknowing GS investors while betting that the value of the equities would fall. Meanwhile, Europe is thinking of suing GS for its prominent part in Greece's financial downfall (clients of GS seem to be at major risk). I'd be happier when their manipulation of the oil market has been proven. Part of the reason we have been waiting for prices to drop is the expected imposition of financial controls on energy speculation by Gary Gensler, head of the CFTC. Depending upon what he does, heating oil prices for next winter could drop dramatically. If the controls are ineffective or don't pass, prices will continue to climb.
Seventy five per cent of the major players in the oil industry feel that speculation has added $10 to $30 per barrel to the cost of crude oil See "Financial Speculation Seen Boosting Oil Price, Reuters News". The CFTC "has proposed limiting the number of futures contracts financial players can hold at any one time". Though the proposed restrictions do not go far enough to really prevent them from continuing to game the market, the major banks and hedge funds are united in their opposition. See "Big Banks, Shell Blast CFTC Position Limit Plan".
The American Gas Group, an association of 195 energy companies and utilities, fuel distributors, the American Feed industry, Americans for Financial Reform and millions of voters in New England and the Mid West support the introduction of these limits which would curb if not end speculation. See article "...CFTC Energy Speculation Limits", Bloomberg Business Week.
Now that we are finally close to seeing the CFTC put in rules to clean up the casino, I urge you again to call your Congresspersons and Senator and express support for strong limits on energy speculation. It would not hurt to contact the CFTC also at 202-418-5000, 202-418-5521 fax, 202-418-5514 TTY, or questions@cftc.gov. A $15.00 per barrel drop in the price of a barrel of oil would reduce heating oil prices by almost 40¢ per gallon, a $30 drop would result in double savings.
Seventy five per cent of the major players in the oil industry feel that speculation has added $10 to $30 per barrel to the cost of crude oil See "Financial Speculation Seen Boosting Oil Price, Reuters News". The CFTC "has proposed limiting the number of futures contracts financial players can hold at any one time". Though the proposed restrictions do not go far enough to really prevent them from continuing to game the market, the major banks and hedge funds are united in their opposition. See "Big Banks, Shell Blast CFTC Position Limit Plan".
The American Gas Group, an association of 195 energy companies and utilities, fuel distributors, the American Feed industry, Americans for Financial Reform and millions of voters in New England and the Mid West support the introduction of these limits which would curb if not end speculation. See article "...CFTC Energy Speculation Limits", Bloomberg Business Week.
Now that we are finally close to seeing the CFTC put in rules to clean up the casino, I urge you again to call your Congresspersons and Senator and express support for strong limits on energy speculation. It would not hurt to contact the CFTC also at 202-418-5000, 202-418-5521 fax, 202-418-5514 TTY, or questions@cftc.gov. A $15.00 per barrel drop in the price of a barrel of oil would reduce heating oil prices by almost 40¢ per gallon, a $30 drop would result in double savings.
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