Heating Oil Prices

Jeff Wisnia · 2008-11-11T18:46:23+00:00

I don't really know much about how the retail home delivery heating oil industry works.But, the recent plummet in crude prices has me wondering what kind of fun and games are going to take place between fuel oil dealers and their customers who engaged in fixed price contracts for the coming heating season back when prices were ascending at an unbelievable rate.I assume the dealers must have entered into futures purchasing contracts with their suppliers to protect them against further price increases and those contracts will have to be honored by the dealers unless they choose bankrupcy instead.I can forsee that the dealers are going to have a helluva time getting all the customers who entered into guaranteed price contracts with them to cough up what they agreed to pay when the retail market price of heating oil drops significantly. Particularly so if those customers are being negatively hit by other aspects of the current crazy economy and use that as a justification to default on their contracts.It should be interesting....Educated comments appreciated.Jeff