Oil companies ending pre-buy plans because of price uncertainty
Oil companies ending pre-buy plans because of price uncertainty - Boston.com
September 4, 2005
LACONIA, N.H. --Some home heating oil companies are suspending programs that allow customers to buy a season's worth of fuel at a fixed price.
Kerry Mattson, general manager of Fred Fuller Oil Co., said his company suspended its pre-purchase incentive program on Friday, and will consider restarting the program if wholesale heating oil prices stabilize.
Customers who have already bought into the program are safe, he said, because their prices are protected by contracts the oil company has signed with its wholesalers.
Normally, the program is designed to allow customers to lock in lower prices, but this year, even the pre-buy prices were high.
Last August, Fuller sold home heating oil at $1.399 per gallon. To buy home heating oil as of last Thursday, a consumer paid $2.599 per gallon.
Other companies face the same problem.
Irving Oil Co. also suspended its price protection program, but will honor already signed contracts. Company representative Michelle Firmbach said the company hopes to reopen the program if oil prices retreat to more stable levels.
Stafford Oil offers its price protection program only in June and July, so it ended more than a month ago, but Charlie Stafford, one of the company's owners, said he has stopped buying oil futures contracts from his wholesalers. Stafford Oil plans to wait, hoping that prices will stabilize, before it buys more contracts for the winter.
"I'd be hesitant to go out and buy a futures contract," Stafford told The Citizen of Laconia, "We should see some price reduction ... that's my best guess, but it's a guess."
Stafford said the market is so unstable now that it would be impossible to predict where prices will stand later this winter.
Home heating oil reserves were greater this summer than in years past, Stafford said, but concerns after Hurricane Katrina have driven the prices up.
September 4, 2005
LACONIA, N.H. --Some home heating oil companies are suspending programs that allow customers to buy a season's worth of fuel at a fixed price.
Kerry Mattson, general manager of Fred Fuller Oil Co., said his company suspended its pre-purchase incentive program on Friday, and will consider restarting the program if wholesale heating oil prices stabilize.
Customers who have already bought into the program are safe, he said, because their prices are protected by contracts the oil company has signed with its wholesalers.
Normally, the program is designed to allow customers to lock in lower prices, but this year, even the pre-buy prices were high.
Last August, Fuller sold home heating oil at $1.399 per gallon. To buy home heating oil as of last Thursday, a consumer paid $2.599 per gallon.
Other companies face the same problem.
Irving Oil Co. also suspended its price protection program, but will honor already signed contracts. Company representative Michelle Firmbach said the company hopes to reopen the program if oil prices retreat to more stable levels.
Stafford Oil offers its price protection program only in June and July, so it ended more than a month ago, but Charlie Stafford, one of the company's owners, said he has stopped buying oil futures contracts from his wholesalers. Stafford Oil plans to wait, hoping that prices will stabilize, before it buys more contracts for the winter.
"I'd be hesitant to go out and buy a futures contract," Stafford told The Citizen of Laconia, "We should see some price reduction ... that's my best guess, but it's a guess."
Stafford said the market is so unstable now that it would be impossible to predict where prices will stand later this winter.
Home heating oil reserves were greater this summer than in years past, Stafford said, but concerns after Hurricane Katrina have driven the prices up.
posted by Marcel at 3:12 PM
0 Comments:
Post a Comment
<< Home