Posted: October 14, 2022
On October 5, OPEC announced it was slashing production by two million barrels a day. As a result, the price of heating oil has spiked over $1.00 per gallon, as of the time of this writing.
This is not just impacting heating oil. Expect natural gas, electricity, and diesel to move higher too. (Fortunately, propane prices have been more stable.) Of course, this is not simply about supply and demand. We’ve learned that when prices move this far this fast, you can always see the impact of Wall Street firms that jump to take advantage of the momentum to make a quick buck. (Or should we say millions of bucks?) It frustrates the heck out of us.
Of course, things can turn around just as quickly. We saw prices spike in spring only to drop by over a dollar in summer. There are just too many variables to know where things will go from here.
I will try to keep you informed as events unfold. There are many things we can’t control, but we will always prioritize our existing customers over new ones. We will go the extra mile to keep you safe and warm. And we will be there when you need us.
Updated March 11, 2022
Unsurprisingly, we’ve been getting many calls around two connected issues- the surge in fuel prices and supply concerns. People are astounded by how much prices have risen, and how fast. So are we. They are also concerned that there will be interruptions in supply that will cause them to run out of fuel.
The Russian invasion of Ukraine shocked the energy markets, sending crude oil up over $130 per barrel.
To give you a sense of this of how this affects your heating oil price, wholesale prices have continued to surge daily- a total of $1.72 in one week. Normally, they might change 5 cents in a week. Propane prices have been better, but still increased over 40 cents per gallon. And the situation remains very fluid.
We don’t know where things will go from here. One thing we can tell you is that we hate this as much as you do. Some people are under the misconception that when prices rise, we make more money. The opposite is true. People cut back usage. They have trouble paying their bills and our receivables skyrocket. Meanwhile, we must pay our suppliers in just 10 days. We must borrow much more from the bank. It is an awful mess for everyone.
One thing you can count on is that we will not let you run out. We have been in business for 95 years and have very strong relationships with suppliers and financial institutions. We are already getting calls from customers who are with other companies who can’t say the same, and who are unable to get deliveries for 20 days out. You don’t have to worry about that with us.
If you are having trouble paying your bill talk to us. Many times, we can work out something to give you more time, since you have been a loyal Wilson customer. Remember that we do offer price protection options. Call us if you’d like to discuss.
Nothing will make us happier than when prices start dropping. Until then trust us to look out for you and pray for the people of Ukraine.
David O’Connell, President