Anyone who’s tried to call for a heating oil delivery over the past couple of weeks knows it isn’t unusual to be waiting on the phone for a little while before getting through to make the order.
I was talking to some owners of discount heating oil companies on Tuesday, and they said business has been brisk ever since the weather turned brisk a couple of weeks ago.
Steve Williams of Affordable Fuels, for instance, says the cold winter weather is good for business and he’s been scrambling to keep up with new orders. Williams’s company reported one of the lowest heating oil prices in metro in a Chronicle Herald survey of heating oil retailers in the Halifax region on Tuesday.
While the price has increased slightly in the past month, the price of the province’s most popular heating fuel has stayed relatively steady this heating season.
The differential, from the lowest price reported on a Jan. 12 survey and the lowest price on Tuesday, was just 3.9 cents per litre. And the highest price on both surveys, 73.9 cents a litre, has stayed the same. That highest price was recorded by Scotia Fuels on both surveys and includes a free service package.
While the lower prices offered by the discounters is attractive, a lot of people stick with the larger heating oil firms because they offer premium services such as credit terms and low lease rates on new furnaces and water heaters.
Williams says the variety of services and prices offered in the local heating oil marketplace shows that the competitive market in metro is working to the benefit of the consumer. Any suggestion that government could do a better job by regulating the heating oil price, he says, is completely wrong.
And competition is slowly heating up from another heating source, natural gas. Heritage Gas, which has the natural gas franchise in metro and a large portion of Nova Scotia, is currently selling gas for an oil equivalent price of 59.5 cents per litre, according to the company’s website ( www.heritagegas.com).
Heritage calculates the one gigajoule of natural gas is equivalent to 26.1 litres of fuel oil, and that equivalent fuel pricing includes a four per cent municipal tax on the delivery charge.
Heritage only has a distribution network in Amherst and a portion of Dartmouth, but there are plans to extend the gas line under Halifax Harbour sometime this year to serve the Halifax peninsula.
While heating oil has stayed relatively low so far this heating season, the bitter cold that drifted into the U.S. Midwest and New England this week is being blamed for a slow but steady rise in heating oil prices during trading in New York this week.
According to a report by the Associated Press, oil traders in New York expect the recent cold will be reflected in heating oil stockpiles, which the U.S. government will report on today.
The market is predicting a large drop in heating oil stocks, which usually means higher prices, but analysts expect official inventory figures to show increases in crude oil and gasoline, according to the AP report.
Despite a recently announced cut in crude oil production by the OPEC cartel, crude prices in New York have remained below the $60 US a barrel mark since the start of the year. Light sweet crude for March delivery rose 14 cents to $58.88 US a barrel on the New York Mercantile Exchange.
There’s nothing like cold temperatures to catch the attention of ordinary consumers and traders alike. As soon as the thermometer dips, the homeowner thinks about filling the oil tank and the commodity trader starts bidding up the price based on the belief that demand will be on the rise.
It seems that is how the market is supposed to work. And if all these factors mean anything, chances are local heating oil will be on the rise before the winter is out.
No comments:
Post a Comment