Oil prices have rebounded from a six year low recently, up almost 40%: but hold your horses.
This rally might be shortlived. The fundamental law of supply and demand is still alive. Global oil demand is
projected to grow 1.3 million barrels a day to 94.5 million barrels a day. This is against production increases
of 1.7% to 95.1 million barrels a day. This is still over production to demand. "supply and demand"
great piece of news is that U.S. production of crude could increase by 14% by 2020. This is according to the EnergyInformation
Administration. Things could change, but it looks good for U.S. consumers right now.
What a winter! One of the coldest winters on record and snowfall record to add to it.
I had prepared for this winter a long time ago. In April of 2001 I finally received approval for a 35000 gallon,
state of the art, oil storage facility on Route 106 in Halifax. It was a big investment but I felt I had to build it
to have a secure source of oil for our customers. As a result, we have significant protection against supply
disruptions that many oil companies in the area experienced this year.
The huge snow falls this winter created slow
going for oil trucks delivering oil and also driving to the deep water terminals in Braintree and Quincy. We did not
lose all that time.
The cold weather then froze over Weymouth Harbor, stopping all shipping to the deep water Citgo
terminal in Braintree. One of the two Quincy terminals also ran out of oil in February. This created delays and supply problems
for the retail oil companies without storage facilities of their own.
I was able to continue delivering oil without
disruption because I could bring in trailer loads of heating oil from the deep water terminals in Rhode Island which did not
have a supply problem.
We received hundreds of calls from other oil company customers who needed oil that their
companies could not provide. Our regular customers take priorty, but I am proud of the effort we took to take care of
many of these people in need.
The inherent expense of my bulk oil terminal which includes initial investment, annual
taxes, maintenance and related expenses has an impact on our competitive pricing of oil, but I believe the peace of mind it
gives our customers is worth a few pennies per gallon. It was a tough winter for everyone, but the days are getting
longer and warmer.
Stayed Tuned Rick