I gave my Magic 8-Ball a good shake the other day, and low and behold this appeared in the little plastic window: “Happy tidings for fuel oil dealers!” In the current economy, with its pressures and uncertainties, "happy tidings" was perhaps a bit too much. But setting the Magic 8-Ball aside, this year's heating season is shaping up to be a welcome relief in some critical areas. Of course, problems still remain.
As noted in a previous issue of Fuel Oil News there currently exist heavy stocks of distillate relative to demand, which should keep oil prices low in coming months. The only significant threat to that would be a general move into commodities by outside investors as a hedge against inflation or in reaction to some of the pressure being put on the dollar. In the last oil bubble that popped when the recession hit, there were undoubtedly many speculators that got burned because of their positions, so it might be assumed that among all the commodities oil, particularly during a recession that zaps demand, would not necessarily be a favored choice. However, early indications are that oil is being impacted by at least some degree of this activity and there has been speculation that oil might reach $100 per barrel. It's one of those things where you just have to wait and see how it pans out.
The second piece of really positive news for fuel oil dealers is that this is promising to be a colder season than average (as was last year) in the Northeast and mid-Atlantic. There is a lot of activity going on in Washington based upon the "reality" of man-induced global warming. Fortunately, Mother Nature did not get the memo this year and some rather inconvenient reports indicate that she may not get the memo for at least a decade or more as we enter into a cooling period. A less exciting aspect, for the this editor at least, is that we can expect heavier snowfall this winter, which means it's time to get the snow blower filled and ready to rumble.
As noted, not everything is rosy. The economy still impacts the ability of customers to both buy oil and upgrade their heating appliances. Not to mention the fact that new construction is stagnant. To offset that somewhat, LIHEAP has been funded and the stimulus, love it or hate it, does contain provisions that can help fund upgrades to more efficient equipment. An effective dealer in this environment should be working to become fully versed in every federal or state opportunity that exists to support their existing and potential customers. Similarly, it’s a good time to look for creative ways to structure payments and incentives to minimize the impact of the economic downturn.
As we approach Thanksgiving, those of us working have a lot to be thankful for and I have no doubt that most of us appreciate that fact. There's plenty of uncertainty and there are plenty of challenges, but there is also some breathing room. And if you can believe it, jobs or not, we do appear to be in at least some form of an economic upswing. Will it have legs—who can say? But for now we have to take what we can get.