Right time to buy bulk fuel

[prosperity]

I am kind of obsessive with most things, and forefront on my mind now is buying bulk fuel oil in the next couple months.

For heat we've used only our wood stove for the past 10+ years, but due to circumstances we will have to use our oil furnace now. Also with this delivery will be filling my 150 gallon skid tank for tractor fuel. I haven't dipped my 1000 gallon underground tank yet, but estimate I will need 400-500 gallons to top it off. Add the 150 tractor tank, and I will be purchasing ~600 gallons. This is a huge purchase and need to get the price right.

15-20 years ago when we were using oil for heat, it didn't matter as much as it was under $1 per gallon. I'll never forget our first delivery was $0.52 per gallon.

I refuse to watch the stock market for this. I have looked at some history graphs of both wholesale and retail pricing. From what I garnered from that, it looks like the 2nd or 3rd week of June has been the lowest price.

Last year I bought just 150 gallons for my tractor tank the 2nd week of June for $3.15 per gallon. I saw over the winter it went above $4 per gallon.

Any guidance here? Anybody else buy their fuel in bulk once a year like this!

I live in rural NW Penna and have only 2 distributors that will deliver here.

 

[Dingeryote]

Yep.

This year has been a quandry. The Wholesale prices havn't really moved much for 5 weeks.

With the fricass brewing in the Ukraine, our friends overseas are stocking up as well as buying futures.
I get the feeling we are just one refinery fire or breakdown from a spike that will last all summer, so I went and bought 600 Gal Friday.

Of course today I see prices dropped 5 cents.

It's always a gamble, and keeping tabs on global events as well as the economy is the only way to make better than a good guess.
It's still a crapshoot.

 

[Gary Fowler]

I asked my bulk distributor if the stock market was aligned with his pump prices and he said that sometimes fuel cost go up when crude goes down and vice versa. It just a crap shoot on what the price will do. You can look at price histories and see when the prices traditionally go up and down but that is about it. Last time I bought 200 gallon and called the dealer the day before and it was a good price but when I got it delivered it was 5 cents per gallon lower, a few days later it was back up.

I think it is speculators that control the prices by buying futures. If they buy high speculating that it is going higher and it doesn't, they still sell the oil at that price and the pump prices still go up accordingly even if crude prices are down at the time.

 

[prosperity]

Dingeryote - that's the hardest part - not to look at the price after you pull the trigger!

Gary - yeah, I hate the speculators and how it affects me personally with a thing like this.

As you both said, it is definitely a crap shoot. I think I am going with my original plan and just order it 2nd or 3rd week of June. I will ask if the price is lower on delivery day if I can get that lower price. Other than that, it's something that I have to just do so I have the peace of mind next winter.

 

[Utopia Texas]

Supply and demand are no longer tied together to determine price. I believe it is the paper shufflers and futures traders that ultimately determine price. How is it there are more natural gas wells in the U.S. today due to fracking yet I get a letter in the mail last week from our natural gas supplier telling me of another price increase. More supply yet a higher than ever cost? The supplier blames the cost increase on increased "overhead" but that story is getting really old. I understand that demand was up due to this last winter's weather but the rig count and cubic feet being pulled out of the ground is record breaking due to the new drilling techniques. Some of the larger companies such as Shell Oil are building huge plants to liquefy natural gas and ship it out to other countries. The almighty buck gets the last laugh, us consumers not so much.

 

[Texasmark]

I was loading up with farm diesel one day and was talking price with the dealer. She said that the state sets the price and it changes daily.....that's dyed, off road diesel. Don't know about the rest of it. So I'm thinking, this dealer bought this quantity of fuel for some price yet doesn't know what she is going to get for profit or loss. Hmmmm. I think I smell a rat.

Mark

 

[Ken45101]

Some of the larger companies such as Shell Oil are building huge plants to liquefy natural gas and ship it out to other countries. The almighty buck gets the last laugh, us consumers not so much.

If it were not for "profit", nobody would invest in extraction or processing. Thank the "almighty buck" that there is ANY supply for you.

Yes, I don't like it either that we export fuel. However, we do need something to assist our terrible cost of imports!

I was loading up with farm diesel one day and was talking price with the dealer. She said that the state sets the price and it changes daily.....that's dyed, off road diesel. Don't know about the rest of it. So I'm thinking, this dealer bought this quantity of fuel for some price yet doesn't know what she is going to get for profit or loss. Hmmmm. I think I smell a rat.

Mark

I wouldn't believe that for a second!

 

[varmint]

One way, possibly, to approach this is to figure out what a fair price would be, arrange to give that money to your oil supplier with the understanding that when they can deliver for that price, they will do so. We have pre-paid a negotiated price several years running, for our home heating oil (600+ gallons a season) and that works for both parties. Of course, trust and fairness are required, not always available.

 

[prosperity]

One way, possibly, to approach this is to figure out what a fair price would be, arrange to give that money to your oil supplier with the understanding that when they can deliver for that price, they will do so. We have pre-paid a negotiated price several years running, for our home heating oil (600+ gallons a season) and that works for both parties. Of course, trust and fairness are required, not always available.

That's a great idea! Since I will be paying cash (or credit card if they prefer) maybe I can make a deal like that - certainly doesn't hurt to ask! I guess I could ask for a target price if $3 per gallon. The only problem I can see if the price never gets to that $3, what happens then?

 

[UpNorth1]

That's a great idea! Since I will be paying cash (or credit card if they prefer) maybe I can make a deal like that - certainly doesn't hurt to ask! I guess I could ask for a target price if $3 per gallon. The only problem I can see if the price never gets to that $3, what happens then?

Cash will probably get you a better price since they don't have to pay the CC company a slice. Depends on the deal you can get them to agree to. Around here, I don't think it is reasonable to expect $3.00/gall for heating oil. I think the lowest it got last summer was in the $3.6x/gal range.