Quote:
Originally Posted by chipj29
I do feel bad for those who signed contracts, pre-buying their oil earlier this year when a gallon of heating oil was going for >$4. I saw someone interviewed on WMUR wondering if the oil companies were going to help them out. Not sure why they would, as the oil companies bought the oil at the contracted price, and would lose money.
IMO, pre-buying is a big gamble. Sometimes you get lucky and lock in at a price before it goes up. Sometimes the opposite happens.
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Some dealers sell downside protection with their pre-buy contracts. We bought a pre-buy contract with Fred Fuller for the coming heating season, but we also bought their downside protection contract which in our case cost $85. Are we ever glad we did! Although we've paid for our heating oil in advance at the pre-buy price, our account is only charged the lower of our pre-buy contract price ($3.97 in our case) or Fuller's cash price on the day of each delivery. (I think Fuller's cash price is now down to $3.27 per gallon.) The cost savings we realize through the downside protection contract will be refunded to us next spring.