If you heat your home with oil...

[TygrBright]

...it might be a good idea to top up your tank before the middle of January.

Oil (and gas) prices will begin rising again immediately after the end of the 4th Quarter, 2008.

Oil companies are selling at a loss during this quarter in order to bring down their annual profits to a point where President Obama and Congress won't be too tempted to implement the windfall profits tax they have been threatening.

First quarter of 2009 they will have to raise prices again in order to recoup some of those losses and reassure their stockholders.

So if you have a tank for heating oil, and you're not one of the unfortunate ones locked into a ludicrously high per-gallon price, get while the getting is manageable. Because there WILL be a price spike in 1st Quarter 2009.

helpfully,
Bright

[Vinca]

1. I thought the price would go down as the price per barrel for crude goes down.

We primarily use a pellet stove, but have an oil furnace, too. Some people are talking as if the price for gasoline would go as low as a dollar a gallon and I was thinking that would be the time to buy heating oil as well.

[TygrBright]

2. It might get that low by the end of the 4th Quarter 2008...

...but it will start rising almost immediately thereafter. You might not see it right away because suppliers will still have some of the cheaper stuff on hand. But when that's gone, they'll be at the mercy of the price spike as well.

I don't think it will be too fast a rise or too drastic (not with Obama's energy people keeping a gimlet eye on the sector,) but it will go up fairly sharply.

prognosticatorially,
Bright

[peacetalksforall]

3. I think we all agree that the prices are manipulated. Go up before a major

American holdiay, go down after. Go up a stay up and from the high the holiday blips are launched. This low is all about legacy. The R's want to say the the price of gas and oil was a whopping low $1.xx when their darling Harvard graduate left office. And who know what the House of Saud and their friends will do without the Bushes in office.

We are experinecing legacy gas and oil. It will confuse the mesage when anyone refers to the employment, manufacturing, defaults, broken city and state budgets, debt up to the sky.

[gristy]

4. lol - says you

Obama won't look at quarterly profits? Obama won't look at the history of the industry's profits? The oil companies think the only thing that matter is this quarter's profits? And come the end of 1Q09 it won't matter how much money they make that quarter? So they are going to burn money this month - absolutely throw it away - to tank this quarter's profits?

I'm sure I haven't heard everything, but this is now one less thing I haven't heard.

:rofl:

[jpak]

5. or get a pellet stove

and stop burning oil altogether...

[Mari333]

6. thanks

when it hit 2 bucks a gallon i called and topped it off in oct. i wish i would have waited, its only 1.50 here. oh well. i will wait til dec 29 and see how low my supply is and maybe call and have it topped off again.

[louis-t]

7. It will be nice to have a prez who tells the truth

instead of spewing Big Oil talking points. Just sayin'.

[PADemD]

8. My budget plan was just recently reduced

http://www.democraticunderground.com/discuss/duboard.php?az=show_mesg&forum=389&topic_id=4598474&mesg_id=4598831

[TheWraith]

9. It doesn't work that way.

Heating oil dealers usually lock in their own prices for a season to make them immune to price spikes. In this case, it also makes them immune to the decline, so prices aren't dropping much.

Furthermore, I think that this "let's sell at a loss for awhile" idea is laughably improbable. For starters, it would require the help of all the major commodity traders to drop the world price of oil, as well as an illegal conspiracy between all the big oil companies.

Here's the simpler, more reasonable explanation: The price of oil is dropping because the economy is cratering and speculators fear the action of a new Democratic administration to curb commodity trading.