Timing of large fuel purchase

[jmc]

I'm thinking of getting a diesel tank and filling it up before the 2006 election. Since Labor day we've seen:

1) lower pump prices
2) predictions of lower natural gas prices this winter
3) various predictions that there is still plenty of oil in the ground

I think this may be a blitz to address voters gripes about oil prices and maybe, concern about the US auto industry.

From the oil industry's perspective, wouldn't it make sense to settle for slightly smaller profits for a few months if it would result in a "friendly" government for a several more years? Then once the election is over, its business as usual. I guess we'll see soon enough is this is too cynical.

 

[MrJimi]

I may be wrong but I thought diesel went bad after awhile?
Others will chime in with better answers
Jim

 

[dirtworksequip]

I have a 500 gal tank. Sometimes I use a lot, sometimes not. I've had fuel sit for a long time in this tank and never had problems with it going bad. Seems like when you try and time the market it always goes down after you buy. Or if you hold off buying for a lower price it always goes up. Check around with different suppliers, because there is a difference in fuel quality. I've bought from some that was terrible and will not buy fuel from that supplier again.

 

[MikePA]

I'm thinking of getting a diesel tank and filling it up before the 2006 election. Since Labor day we've seen:

1) lower pump prices
2) predictions of lower natural gas prices this winter
3) various predictions that there is still plenty of oil in the ground

I think this may be a blitz to address voters gripes about oil prices and maybe, concern about the US auto industry.

From the oil industry's perspective, wouldn't it make sense to settle for slightly smaller profits for a few months if it would result in a "friendly" government for a several more years? Then once the election is over, its business as usual. I guess we'll see soon enough is this is too cynical.

For years (decades?), gasoline prices have gone up (Great Conspiracy 1) for the summer driving season and dropped in the fall (Great Conspiracy 2).

For centuries (?) elections have been held in the fall.

Placing these 2 unrelated events into a conspiratorial cause-effect relationship creates Great Conspiracy 4 - Oil Companies conspire to lower prices in order to control elections.

(Note: Great Conspiracy 3 is the infamous Government-Police-Insurance Company conspiracy which causes sobriety checkpoints to spring up as revenue generators.)

 

[EddieWalker]

I just paid $2.29 a gallon for farm diesel last week. Gas is droping like crazy, but diesel is holding it's price.

I use too much fuel to hold on to any, but I wonder how much you could save if you don't use very much at a time compared to what it would cost to buy the tank?

What does the tank cost versus the savings of buying today if the price goes back up again? A .50 cent increas at 500 gallons is $250. Does this justify the expense of a tank? To me, this doesn't work out to a good buy, especially if you can't use 500 gallons in less than a years time.

I found several damaged aluminum 100 gallon tanks off of semi trucks that I got for free. They were badly dented and had no caps. I worked with them and put them on a trailer that I haul to the fuel station. I save .10 cents a gallon picking up the fuel as compared to having it delivered. I also save .03 cents a gallon paying for it when I buy it instead of running an account.

For a small CUT, I'd think a hundred gallons would be plenty. Find a way to haul it to the station and don't try to speculate on fuel prices. It's too big a headache with minimal returns.

Eddie

 

[Highbeam]

I have been watching fuel prices too as my pair of fuel drums are empty and I have been buying on-road fuel while I wait. Diesel fuel is dropping fast. It is dropping slower than gasoline and the price is dropping much faster at some stations than others.

I'll agree with Eddie that we're splitting hairs when dealing with such small quantities as needed to run a CUT. A hundred gallons will last about 100 hours on the larger CUTs. 200 hours a year is a decent average so 200 gallons per year. So you save 100$ if you guess and time well enough to get 50 cents off. Now you have old fuel, a lot of old fuel that if it goes bad means a lot of bad fuel, and you bought a pump and tank for it.

I buy a decent amount of fuel in barrels since I get superior convenience and Off road tax savings in the 40-50 cent range. That is the reason for storing fuel at home, timing the purchase to save a few more bucks is a bonus.

 

[NewToy]

I believe the fuel cost will come up after the elections, either the cold weather will drive it up or it's the conspiracy theory. It's hard to discount the latter since the oil lobby disperses over 80% of their political donations to buy "Red" M&M's, they only spend 20% on the "Blue" ones. Not that difficult to see which flavor they prefer.
John

 

[LBrown59]

I believe the fuel cost will come up after the elections, either the cold weather will drive it up or it's the conspiracy theory. It's hard to discount the latter since the oil lobby disperses over 80% of their political donations to buy "Red" M&M's, they only spend 20% on the "Blue" ones. Not that difficult to see which flavor they prefer.
John

Your chances of playing the stock markek are better than timing pump purchases.

 

[Slamfire]

Off road diesel was $1.69 + 7% sales tax here this last week. Oil industry experts expect the price for crude to continue to fall, but OPEC is drumming up a meeting in the near future. How much do you want to bet they'll agree to cut production to hold the price up? When you hear the oil ministers are meeting, buy your fuel at that point. Speculators will watch the same thing and will bid up the per barrel price, so don't hesitate. ALL oil sells on the commodity markets, so the producers don't set the price, but they can manipulate the supply.

 

[randy41]

you can buy home heating oil (diesel) futures. if i had a fleet i would just to stabilize my costs.