When to fill my tanks?

[Patriotsnjz + 7]

Ladies & Gents,  I love reading your posts, and wish I could contribute, but I am way out of my league here.  Just trying to get a sense of when I should fill my 2 oil tanks for the winter.  (I have 2 - 275 gallon tanks and live in Massachusetts).  Last year I bought too early, around this time I believe, when oil was 1.89/gallon.  Who wouldn't, right?  Right now, my dealer is at $2.49.  I know where not talking thousands of dollars here, but I hate paying more than I should just for not reading up on things. Any suggestions would be much appreciated (besides switching to natural gas, not an option).  Thanks!! 

[Refman + 207]

Distillate inventories are low compared with historical averages, so if Winter is colder than normal you could see some pretty good price spikes.

Next year will be even worse with the new IMO 2020 regulation coming into effect.

If they were my heating oil tanks, I'd fill them now. You can  always hedge your bets and fill one now and the other later.

[Jan van Eck + 7,558]

You are buying a retail oil product, which is being (typically) barged in.  If you are in Central to Western Mass., your oil is coming up a pipeline from the New Haven Terminal on Long Island Sound, the oil comes by barge from NYC.  If you are in Eastern Mass. it is likely your oil is sourced from the refinery over on the Western side of Staten Island, near the Kill Van Kull. The larger factor in your price of retail oil is not what is happening globally, but the area demand for heating oil from the Staten Island/NJ distribution area.  There is a lot of oil heat consumed in that area!  Plus your competition with oil-by-rail headed up into Vermont and New Hampshire  (and also by small tanker to Maine). 

So:  what you are going to end up paying is largely influenced by the buying habits of your neighbors (taken in the multi-State concept of neighbors).  In the "old days," heating oil supplies also flowed into New England from Chavez' Venezuela, which he shipped up and distributed for free to New England's poor people in his efforts (successful) to embarrass the bureaucrats and politicians in Washington  ("See, you don't care about the poor, we do, so you are morally inferior bums.")  [In that sense, Chavez was correct, DC is composed of bums, but you already knew that.]  That Chavez oil is no longer there, so you have added pressure on supplies from NJ. 

The other factor to consider is that (additional to free oil)  heating oil also flowed into New England ("N.E.") from the Citgo refinery operations. Citgo, as I recall, is or was owned by PVDSA.  Those operations, including the refineries and the distribution platforms, are going to be under increasing siege pressure in the US Courts by creditors.  If a Citgo refinery is seized and then shuts down (entirely likely result) then both gasoline, Kerosine, jetfuels, and heating oils will be off the market as inputs. 

Irving has a refinery in St. John, NB, and sells into New England.  How they are set up is unknown to me, but Irving remains a swing seller in these markets.  Irving sources both from Bakken Oilfields and from the Middle East.

All things considered, your local "dealer" is still going to be influencing your oil price at retail more than the above factors.  Dealers typically are boosting the price up by at least 40 cents a gallon, probably 60 cents.  What happens in the NE retail market is that there are these little independent businessmen who have one truck and operate on the "COD" principle, making spot deliveries. If you tie into these one-man shops (and some are now a bit larger, due to their adroit hustling) you can drop 40 cents off the full-service dealer price.  You can find these guys in the telephone book yellow pages, they typically advertise as "COD" oil.  Another source is an aggregator service on the web, which couples all these little guys together and then charges them five cents a gallon for bringing in the sales lead.  If you type in "Discount heating oil MA" into your search engine then a whole slew of these outfits pop up.  Remember that they all sell exactly the same oil, all bought from the distribution terminal in wherever it comes into your area, the product is not distinguishable no matter what the hustlers say. And there is always someone ready to sell it cheaper.  Filling both tanks always gets you the best price. 

Since your neighbors do not fill their tanks in August, now is the best time for the first load.  You will take a beating in January when this load runs out, but such is life (unless you install a 1,200-gal tank, which is what they do in Germany for the same reasons). A quick scan shows COD at below 2.42.  Happy hunting!

 

[Rodent + 1,424]

17 minutes ago, Jan van Eck said:

You are buying a retail oil product, which is being (typically) barged in.  If you are in Central to Western Mass., your oil is coming up a pipeline from the New Haven Terminal on Long Island Sound, the oil comes by barge from NYC.  If you are in Eastern Mass. it is likely your oil is sourced from the refinery over on the Western side of Staten Island, near the Kill Van Kull. The larger factor in your price of retail oil is not what is happening globally, but the area demand for heating oil from the Staten Island/NJ distribution area.  There is a lot of oil heat consumed in that area!  Plus your competition with oil-by-rail headed up into Vermont and New Hampshire  (and also by small tanker to Maine). 

So:  what you are going to end up paying is largely influenced by the buying habits of your neighbors (taken in the multi-State concept of neighbors).  In the "old days," heating oil supplies also flowed into New England from Chavez' Venezuela, which he shipped up and distributed for free to New England's poor people in his efforts (successful) to embarrass the bureaucrats and politicians in Washington  ("See, you don't care about the poor, we do, so you are morally inferior bums.")  [In that sense, Chavez was correct, DC is composed of bums, but you already knew that.]  That Chavez oil is no longer there, so you have added pressure on supplies from NJ. 

The other factor to consider is that (additional to free oil)  heating oil also flowed into New England ("N.E.") from the Citgo refinery operations. Citgo, as I recall, is or was owned by PVDSA.  Those operations, including the refineries and the distribution platforms, are going to be under increasing siege pressure in the US Courts by creditors.  If a Citgo refinery is seized and then shuts down (entirely likely result) then both gasoline, Kerosine, jetfuels, and heating oils will be off the market as inputs. 

Irving has a refinery in St. John, NB, and sells into New England.  How they are set up is unknown to me, but Irving remains a swing seller in these markets.  Irving sources both from Bakken Oilfields and from the Middle East.

All things considered, your local "dealer" is still going to be influencing your oil price at retail more than the above factors.  Dealers typically are boosting the price up by at least 40 cents a gallon, probably 60 cents.  What happens in the NE retail market is that there are these little independent businessmen who have one truck and operate on the "COD" principle, making spot deliveries. If you tie into these one-man shops (and some are now a bit larger, due to their adroit hustling) you can drop 40 cents off the full-service dealer price.  You can find these guys in the telephone book yellow pages, they typically advertise as "COD" oil.  Another source is an aggregator service on the web, which couples all these little guys together and then charges them five cents a gallon for bringing in the sales lead.  If you type in "Discount heating oil MA" into your search engine then a whole slew of these outfits pop up.  Remember that they all sell exactly the same oil, all bought from the distribution terminal in wherever it comes into your area, the product is not distinguishable no matter what the hustlers say. And there is always someone ready to sell it cheaper.  Filling both tanks always gets you the best price. 

Since your neighbors do not fill their tanks in August, now is the best time for the first load.  You will take a beating in January when this load runs out, but such is life (unless you install a 1,200-gal tank, which is what they do in Germany for the same reasons). A quick scan shows COD at below 2.42.  Happy hunting!

 

can I get a clarification as to what product "heating oil" is that you were talking about? some of these products have more than one name, and some of the names are sometimes used incorrectly or rather, generically. 

we mostly use propane here. My dad every year goes around his neighborhood and gets about 30 names of people that are willing to buy propane from whatever company my dad can get the best deal with. My dad takes the list of names and addresses around to the local propane companies and bargains with them to get the best deal for the neighborhood. The propane company either gets business from the entire neighborhood or none of the neighborhood. In doing this my dad always seems to pay about $0. 50 less per gallon than I do. so if you're ambitious you can get together with your block and conspire to get a lower price. I can never be bothered to do this, because I for the most part have no idea who any of my neighbors are even though I've lived here for a very long time.

[Patriotsnjz + 7]

Firstly, thank you Refman, Jan V and Rodent for the responses!  You guys are the reason I love this site.  I have learned so much from you guys!  Secondly, the #2 heating oil I buy went up 5 cents/gallon (almost right after I posted it)!!  Jan, you are absolutely right on the COD stuff.  I have used  http://www.newenglandoil.com/massachusetts/zone3.asp?x=0   for the reasons you mentioned.  I actually stayed with my local guy when he left this group a couple years ago (Lapuma Fuel out of Dedham, MA).  They probably figured they weren't worth the 5 cents per gallon for leads.  Anyway, I emailed these guys to see if I could get one of their promo codes they sometimes send out, and sure enough they gave me 5 cents off per gallon.  Taking Refman's advice and filling now at $2.49/gal. 

Thanks a lot guys!  

[Jan van Eck + 7,558]

12 hours ago, Rodent said:

can I get a clarification as to what product "heating oil" is that you were talking about? some of these products have more than one name, and some of the names are sometimes used incorrectly or rather, generically. 

 

Heating oil is basically diesel without the road tax.  Also called "#2."  

There are coarser heating-oil blends, known as #4, #5, and #6 (bunker), but you need fancy pre-heaters and filters to handle that stuff, so it is typically burned in much larger furnaces such as in office buildings and 30-unit apartment blocks.  Homes universally have light-oil furnaces and they all burn #2. 

At one time I had this VW Jetta diesel with an engine that had 24.5/1 compression, and you needed glow plugs to start it.  I ran the thing on #2 heating oil, worked just fine.  New York City to Buffalo for five bucks.  Throw two five-gal cans of my ersatz diesel in the trunk and forget about filling stations. 

[Rodent + 1,424]

1 hour ago, Jan van Eck said:

Heating oil is basically diesel without the road tax.  Also called "#2."  

There are coarser heating-oil blends, known as #4, #5, and #6 (bunker), but you need fancy pre-heaters and filters to handle that stuff, so it is typically burned in much larger furnaces such as in office buildings and 30-unit apartment blocks.  Homes universally have light-oil furnaces and they all burn #2. 

interesting. I guess I'm trying to equate it to what I would say if I called up a supplier to order some. I don't think I've ever met anyone who uses anything called that. would they just say "heating oil"?

https://www.google.com/url?sa=t&source=web&rct=j&url=https://www.eia.gov/consumption/residential/reports/2009/state_briefs/pdf/mi.pdf&ved=2ahUKEwiolJrgkJbdAhWId98KHc7nBB4QFjAJegQIBBAB&usg=AOvVaw1kJidVyLghB-uF1U-j-0cc

in that doc, where is main heating fuel used, this would be the "other" category it references?

[Jan van Eck + 7,558]

1 hour ago, Rodent said:

interesting. I guess I'm trying to equate it to what I would say if I called up a supplier to order some. I don't think I've ever met anyone who uses anything called that. would they just say "heating oil"?   YUP!

https://www.google.com/url?sa=t&source=web&rct=j&url=https://www.eia.gov/consumption/residential/reports/2009/state_briefs/pdf/mi.pdf&ved=2ahUKEwiolJrgkJbdAhWId98KHc7nBB4QFjAJegQIBBAB&usg=AOvVaw1kJidVyLghB-uF1U-j-0cc

in that doc, where is main heating fuel used, this would be the "other" category it references?      YUP!

Yup, you would be "other" in the reference document.  Heating oil is logically not used in your area; natural gas instead.  And that makes sense; heating oil is a refined product, and would cost quite a bit more than gas.  Heating oil is very common, indeed the dominant heat fuel, in New England.  Due to the heavy rock formations, it is costly to build gas pipelines.  Gas in NE is used as an industrial fuel if near the pipe, and for electricity generation  (typically about 29% of grid power). 

Propane is also prevalent in the North Country, as it flows as a gas from outside tanks of liquid propane.  Oil cannot be outside as the temps get way too low and the stuff will congeal. Even diesel will gel in the truck tanks, so on really cold nights the trucks are left running when parked, to let heat from the overflow of the circulating pump go back into the tank and keep it warm.  Some trucks have immersion electric heaters also, but you cannot shut down and rely on the probes, as the lines themselves will gel up. Some truckers will dump 30% kerosine into the tanks to keep them fluid, but because kero is not taxed as a road fuel, the DOT guys frown on that. The result is that school buses that are not plugged in or left running do not start in the early morning, and then school gets cancelled! 

Remember that propane only develops 90,000 BTU per gallon, while heating oil develops about 130,000 BTU.  So you need quite a bit more propane to get the same heat as a tank of oil. Keep that in mind when pricing these fuels.  Propane is popular in the North Country as it burns cleanly, is a gas after the expansion valve on the tank, the tank does not freeze up if you keep it at 30% full, and there is basically no furnace maintenance. The output of propane combustion is CO2 and distilled water.  The water can be used in a steam iron, for example, or to top up lead-acid batteries, far better than tap water with minerals. Also perfect for shampooing hair, no minerals!

Edited August 31, 2018 by Jan van Eck

[Jan van Eck + 7,558]

15 hours ago, Patriotsnjz said:

  Taking Refman's advice and filling now at $2.49/gal. 

Thanks a lot guys!  

You may get lucky and use less this year.  The "Farmer's Almanac" is forecasting a light winter, not like last year, apparently  (I have not read this, but am told that is what it says).  The Almanac is just about never wrong.   The lower demand on the heating oil stock will keep the prices at the dock down, so the COD guys will be competing fiercely for business and keep their prices down.  The full-service guys selling on winter contracts, not so much. 

[NickW + 2,714]

If you haven't already look at ways to improve the thermal insulation of your house. That's quickest way of shaking the Oil industries yoke off your back.

[Patriotsnjz + 7]

Jan,  You may wanna check that source!  I've read opposite:

 

Winter will be 'teeth-chattering' cold, have plenty of snow, Farmers' Almanac claims

[Engineer Scott 0]

You are both correct...apparently there are two Farmers' Almanacs:

 

http://www.foxnews.com/us/2018/08/30/winter-will-be-teeth-chattering-cold-have-plenty-snow-farmers-almanac-claims.html

 

[Patriotsnjz + 7]

Who new?  I hope The "Old" one is right!!

[Cheapest Oil 0]

We've just started to compare heating oil prices in America. In the UK prices are at nearly a 5 year high so we hope you got some back in August. We’re currently covering the following states: New York, New Jersey, Pennsylvania, Massachusetts, Connecticut, Rhode Island and Maine adding lots of prices all the time - https://www.CheapestOil.com 

[ceo_energemsier + 1,818]

On 8/28/2018 at 9:07 AM, Patriotsnjz said:

Ladies & Gents,  I love reading your posts, and wish I could contribute, but I am way out of my league here.  Just trying to get a sense of when I should fill my 2 oil tanks for the winter.  (I have 2 - 275 gallon tanks and live in Massachusetts).  Last year I bought too early, around this time I believe, when oil was 1.89/gallon.  Who wouldn't, right?  Right now, my dealer is at $2.49.  I know where not talking thousands of dollars here, but I hate paying more than I should just for not reading up on things. Any suggestions would be much appreciated (besides switching to natural gas, not an option).  Thanks!! 

Sooner the better!!! The longer you wait more pressure on the price to go up.

In the late 90s's and into the late 2000's , I knew some investors, who would buy heating oil from the Carib. region and Venezuela and they would lease tanks in the NE US. They would buy the heating oil fairly cheap and then turn around sell them in season in the NE US to local wholesalers and distributors, they would offer upto a 7cents a gal discount that would be passed along to the customers(end users).

There are "member clubs" that offer heating oil on discount and you can buy membership earlier in the year.

You already ruled out switching to natgas as an alternative.

Jan has given you a very comprehensive answer. Out here in the Western US (Rockies), Propane is very popular.

[ceo_energemsier + 1,818]

On 8/28/2018 at 9:07 AM, Patriotsnjz said:

Ladies & Gents,  I love reading your posts, and wish I could contribute, but I am way out of my league here.  Just trying to get a sense of when I should fill my 2 oil tanks for the winter.  (I have 2 - 275 gallon tanks and live in Massachusetts).  Last year I bought too early, around this time I believe, when oil was 1.89/gallon.  Who wouldn't, right?  Right now, my dealer is at $2.49.  I know where not talking thousands of dollars here, but I hate paying more than I should just for not reading up on things. Any suggestions would be much appreciated (besides switching to natural gas, not an option).  Thanks!! 

You might have a price spike in your supplies because of this:

Major Incident at St John Refinery in Canada

Tuesday, October 09, 2018

 

 

 

 

Irving Oil has announced that a 'major incident' has occurred at its Saint John refinery in Canada.

 

Irving Oil has announced that a “major incident” has occurred at its Saint John refinery in Canada.

 

We can confirm that a major incident has occurred at our Saint John refinery this morning. We are actively assessing the situation at this time and will share more information when available.

— Irving Oil (@irvingoil) 8 October 2018

 

 

In a statement posted on social media platform Twitter, the company revealed that all employees and contractors working on the site have been safely accounted for. Several contractors were however being treated for non-life threatening injuries, Irving Oil said.

 

As this is an active situation, we will be sharing more information as it becomes available. Thank you to all first responders who are working in response to this incident. 2/2

— Irving Oil (@irvingoil) 8 October 2018

 

 

The Saint John refinery produces over 320,000 barrels of finished energy products per day, over half of which is exported to the US Northeast. The refinery opened in 1960.

[Patriotsnjz + 7]

So oil is back down to $2.49/gallon.  I've been out of the loop for a bit.  Why has it come back down?