Wholesale heating oil prices have fallen dramatically over the last 10 days or so- falling almost 50 cents per gallon. The situation is awkward for some heating oil companies who have been doing lock-ins/caps/pre-buys, as the prices offered look (for the moment) to be insanely high.

Right now, HEAT USA members are looking at prices that are in most cases about 50 cents lower than prevailing retail prices. The situation is fluid of course, and winter weather is a long way away, but it does feel good to see prices fall for once doesn’t it?

A great article on Bloomberg today outlining how Washington aims to curb abuses by speculators in the energy markets. There are lots of opinions swirling about how much of an impact energy traders have been having on the current cost of crude.

Interesting side note however- as the prospect of these bills getting passed seems brighter, the price of crude oil has plummeted more than $12 IN A WEEK. Hmmmm. Maybe there is something to this whole oil speculation thing. Party is over boys! Time to find a new way to put the screws to us.

American Airlines recently announced that it is grounding nearly 10% of its fleet. Many other airlines have begun to follow suit. American was also the first to adopt the $25 fee per bag policy, which other airlines followed. Overall airlines are flying fewer planes, fewer flights, and the flights they are flying are carrying much lighter payloads and flying at slower speeds.

What does this have to do with heating oil? Jet fuel is a souped-up version of diesel fuel, or if you like,  a very souped-up version of heating oil. They are made from a lot of the same things produced by the refineries. If demand for jet fuel goes down, which we know is happening right now, this might take a little bit of the pressure off of diesel and heating oil.

Crude oil took an absolute dive in early trading today. This coincided with OPEC making gloomy statements about drop in crude demand globally. Perhaps in the midst of lighting cigars with hundred dollar bills they forgot that outrageously high prices tend to convince the global consumer to cut back (see our posting on HEAT members dramatic conservation below).

‘Demand destruction’ as the Wall Street types call it, is real and happening because the American consumer is in a very bad mood.

Usually a sleepy month in the heating oil industry, July is setting new records for new applications for membership in HEAT USA. Given current high oil prices, this shouldn’t be much of a surprise, but today alone we signed up nearly 40 new members. That is really unheard of for a day in July, when new applications fall to a trickle, and then begin to pick up in mid-August.

In a bit of rare good news for energy consumers, Senator Charles Schumer (D-NY) and Senator Judd Gregg (R-NH) each proposed over the weekend that LIHEAP funding be increased by as much as $2.5 billion. This is an expensive but very necessary measure to keep those with low or fixed incomes safe and warm for the winter. Contact your local representative if you want to express your support.

An interesting story about how synagogues are dealing with the rising price of home heating oil, featuring a bland (he swears he had much more interesting things to say to the reporter) but nonetheless important quote from HEAT USA President, Andrew Heaney.

Click here to see the article

A recent government report says that the US reduced its imports of crude oil by about 9 million barrels in the month of May. Despite these soft demand numbers, global prices just hit an all time high today of $147, mostly on fears of what might happen with Iran. We still think prices today look like a very big bubble waiting to be popped.

In an Op-Ed piece today in the Wall Street Journal, legendary oil man and billionaire investor T.Boone Pickens, offered up his vision of how the US could find its way out of its dependence on foreign oil. The two key elements of his plan are to take advantage of what he calls the ‘Saudi Arabia of Wind’, which is the corridor from West Texas north to Canada. Mr. Pickens neglects to mention in his piece that he is making one of the biggest bets ever made on wind power- some $10 Billion of his own money- that is completely dependent on government subsidies of renewable power. But we digress.

The second part of his plan is to replace automotive fuels with natural gas- a fuel that is plentiful here in the United States. Right now much of our natural gas goes toward powering our electrical grid. Replace this with wind, Pickens says, and let natural gas power our cars.

As far as we’re concerned, it sounds like a pretty good plan so long as the American taxpayer is willing to foot the bill for the subsidies, and given the price of oil right now, they just might be willing to do it.

Newsweek has an article and video of Pickens describing his plan.

The HEAT website continues to develop with the arrival of the HEAT Member Center. The Member Center allows  you to communicate with HEAT online, whether you want to renew your membership, provide us with a referral, or request a quote on new heating equipment. It is a fast, convenient way for you to transact any business you have to take care of with HEAT even if it is before or after our normal business hours. We hope you take advantage of it, and more importantly, we hope you like it.