Prebuy Oil for 2009-10 Heating Season

[Rag Top Daze]

I know, summer hasn't even started, but I'm hearing people who are locking in their oil for next season already. Has anyone in the lakes region gotten a good deal? We are in Moultonborough and use about 800 gals a year. Any suggestions?

[topwater]

I bought my pre-buy back in Feb. I use Fuller Oil and pre-bought 750 gals@ $2.49 gal. Might be good, might not, but I have been doing this for a number of years and never had a problem. I also won't have a $500 oil delivery bill in the middle of Jan either.:)

[chipj29]

With the volatility of oil prices right now, I am not sure I would lock in right now unless I could get a guarantee that if prices drop then my pre-buy price would as well.
Last year, people were getting smoked due to the rapid rate the oil prices bought. Those who pre-bought at $4/gallon were begging their dealer to drop their price, many to no avail. They were paying $4+/gal for oil priced at far less than that.

Personally I am riding this out, thinking that oil prices are going to drop a bit before fall. That is just my uneducated opinion.

[Lakegeezer]

The advice from Chip29 is good! I signed up for Our Town pricing on propane last year and its now $.25 above normal pricing. I paid above market price all winter and the contract lasts until September. The new pricing for next year is out, and is better, but Eastern just filled my tank, which will last well into the new pricing season. They know how to maximize their profits. Murphy's law applies - you are likely to get ripped-off no matter what you do.

[Slickcraft]

The current cash price is about $2/gal;
http://www.newenglandoil.com/newhampshire/zone3.asp?x=0

While it is possible that it will fall below that in the next few months, my opinion is that an upward trend is somewhat more likely. So last Friday I made the call to get both tanks filled this week; that will last us most of next winter.

[This'nThat]

With the volatility of oil prices right now, I am not sure I would lock in right now unless I could get a guarantee that if prices drop then my pre-buy price would as well.Oil companies call this the "Cap" option. You buy the Cap, and you're protected on both sides.

Here's how it works. You sign up for the pre-buy. Current price (as of last week) is $2.45/gal. This protects you from price increases next year.

You also pay $0.30/gal to protect you from the downside. That means if oil goes below $2.45/gal, you pay the lower price on fill-up.

The payment plan is monthly (pre-buy is paid all at once at the beginning of the year). Some oil companies (like Stafford Oil) will also give you a $0.10/gal refund at the end of the year -- so your Cap cost is really only $0.20/gal.

I did this last year when oil was $4.50/gal at the time of the contract, and saved a bundle.