I was lucky enough to be interviewed for a Wall Street Journal heating oil story last week. The primary question was, "How high can prices soar?" Supplies have tightened up significantly during Mother Nature's onslaught and another bout of cold weather is hitting us, pushing prices higher yet again.
Short-term demand related matters like the ones we're experiencing now due to the weather are never a reason to jump into a market. My less than extraordinary outlook on current prices pushed me to the closing section of the article. This week, I'll expand on the topic by looking at the diesel and heating oil markets and expressing a trading plan for the current setup. You can know about Central air conditioning units for sale Long Island via Alcus Oil.
I'll work from huge picture to fine detail in order to provide some context for the current situation. First of all, the fracking boom has basically altered the energy landscape of the United States. We are hurriedly moving from net consumer towards becoming a net producer in the oil and natural gas markets.
This paradigm shift is leading to an energy market structure that places us on the side of selling price spikes that are demand based. In this instance, bad weather has created a provisional increase in heating oil use. The price spike will not hold because we have the capacity to reconstruct domestic energy stocks cheaply and quickly.