Entry bubble Brace Yourself for Home Heating Oil Prices

By: Joanne | September 09, 2008 | Category: Home and Family

turning down the thermostat to conserve energyLast week we filled the home heating oil tank in preparation for the cold weather. We got 435 gallons at $3.60 a gallon. Payment due upon delivery – swoon. What’s up with that?

There are a lot of factors that determine the price of home heating oil. Even when the price of crude oil is stable, it’s typical for home heating oil prices to rise in the winter months when you need it the most. It’s that old supply and demand thing from Economics 101.

We don’t have the furnace cranked on yet, but already we’re thinking of things we can do to save a few bucks and increase the energy efficiency of our home this winter. We’ve got some old, old windows in our old, old house and I think that the cost of fuel this winter is going to be enough to push us into replacing them with modern, energy efficient windows. I’ll actually clean the radiators, which, um…hasn’t been done in a while. We’ll have the furnace cleaned and the filters replaced so it’s running in tip top shape and we’re definitely going to be keeping the temperature a few degrees cooler this year. We’ll just have to break out the sweaters and fuzzy slippers and curl up with the warm kitties. I read in Consumer Reports that by turning your thermostat down between 5 and 10 degrees at night can reduce your heating costs by 20 percent. That’s pretty impressive. If you’re away from the house during the day it’s also a good idea to turn the heat down while you’re gone. If you have trouble remembering to turn your thermostat down, some people find that programmable thermostats are helpful.

The cost of heating the house this year will definitely be a burden, but we’ll make it. If you’re worried that you’re not going to be able to afford to heat your home, you should contact your state coordinator for the Low Income Home Energy Assistance Program (also known as LIHEAP).

| View Comments [16] | envelope E-mail This Entry | Tags: assistance   energy   heat   joanne   liheap   oil   winter  

 

Entry bubble Why Are Gasoline Prices So High?

By: Jake | May 26, 2008 | Category: Money

My post last week about saving money on gas had many of you asking why the price of gasoline was so high. You weren't the only ones.

Congress brought executives from oil companies to Capitol Hill last week and asked them to explain the price hikes. Unfortunately, there weren't too many clear answers. I'm not an oil expert or economist, but in this post I'll try to shed light on why gasoline prices are high.EIA Gasoline Price Chart

The Energy Information Administration (EIA) of the Department of Energy (their job: to provide neutral data regarding energy in the U.S) says the cost of crude oil is the main contributor to the price of gasoline. Crude oil accounts for 70% of the price at the pump. According to the EIA, the spot price of West Texas Intermediate crude oil, which is the U.S. benchmark for light, sweet crude oil, has risen steadily from $101.54 per barrel on March 31 to a record high of $128.93 per barrel on May 20.

The main reason for crude oil's price increase is high worldwide demand. Countries like China (especially with the recent earthquake) have increased their imports of petroleum. Political events and conflicts in oil producing countries also affect the price. What's more interesting is that crude oil is traded worldwide in U.S. dollars and since the value of the dollar is declining, it causes the price of crude to go up.

In the EIA's "This Week in Petroleum" published May 21, they project prices will go up in June and will rise as long as the price of crude oil keeps increasing. The report adds that the usual Memorial Day and summer travel season increase in demand should be lower due to higher prices, but this will not have too much of an effect on price since millions will still travel. Policymakers have proposed lowering or repealing gas taxes, but it's not certain how much this would lower the price.

As long as the price of crude oil continues to rise, we'll be paying more for gasoline. Let's hope gasoline will never cost more than a gallon of beer or ketchup.

| View Comments [21] | envelope E-mail This Entry | Tags: economy   fuel   gas   gasoline   jake   oil   world