Friday, July 18, 2008

is it a bargain at that price and other stuff

When I go grocery shopping, I always look to see if Turkey Hill Tin Roof is on sale and, if it is, I get it for Stanley. For the past couple of months, the price of this ice cream has been $3.99—at least at the Westport Stop & Shop. On Tuesday, I looked at the price signs hanging from the freezer shelves, proclaiming that the price is $3.99, down from $5.99 on November 23, 2007. Wow, a two-buck drop. On a half-gallon of good ice cream. Only ... it’s not a half gallon anymore. No. It’s 1.5 quarts. Well, okay, so the price is down 33% while the quantity is only down 25%, so it’s still cheaper, right? Only I don’t remember if the size back in November was a full half gallon or not. So I don’t really know. I just remember that the cartons were bigger—the whole reason I noticed the smaller quantity to begin with is I noticed the cartons are much smaller than they used to be. We have a small freezer, so I’m very aware of the size of the stuff I buy to fill it.

Anyway, Slink, our Very Bad Cat, has a way of ensuring he gets some attention when he wants some attention:

image
you WILL pay attention to me ... (click to enlarge)

So he sprawls long enough across Stanley’s keyboard to totally disrupt the flow of whatever Stanley was trying to work on. I swear this cat has ADD. He comes, he wreaks mayhem, and before one can adjust to Slink’s new reality, he leaves to chase a moth or watch the bird in the wisteria or just torment the dog.

Twitch is a very mellow cat. We placed a stem of crocosmia on the desk, and he’s content to just sniff it and see if he can scratch his chin on it and if not, it’s not worth bothering with:

Twitch examines crocosmia
twitch examines the crocosmia (click to enlarge)

This particular crocosmia is called Lucifer. Slink had to check it out after Twitch finished his examination:

slink eats the crocosmia
slink eats the crocosmia (click to enlarge)

And because Slink is a devil cat, he tried to eat Lucifer. He was shooed away, but later snatched the leaves, which I found shredded all over the office.

HEATING OIL
July is the time of year to secure heating oil contracts here in New England. You try to decide if it makes sense to pay the market rate at time of delivery, to pay a fixed rate no matter what the market rate is (along with a fee), or to pay a capped rate, which requires an up-front payment of a certain amount. The up-front payment does not count toward your oil bill—it’s just a fee the heating oil supply companies charge you to cover their asses. This is a new thing this year, at least around here.

Then you have to figure out who offers the best rates, which involves phone calls (the websites are usually non-informative or very confusing, especially about this new charged for the capped rate) and waiting for information. Then you need to figure out how much oil you’re going to need this winter, which is a real crapshoot in Southern New England. Last couple of winters were mild, but three years ago it got really cold, but if it’s windier than usual (we live on the coast) it’s colder than usual even though the temperature might be higher ... and last winter we got a new furnace, so I couldn’t even average over three or four years. I settled on 700 gallons.

Then you have to try to guess what the cost of heating oil is going to be. You can’t really go by the price of gas—it’s more like the cost of diesel (since heating oil is diesel with different additives) so you need to ignore the brouhaha over the rising cost of gas and look at other stuff—requiring a lot more knowledge than I have, or have time to acquire and sort out. Fortunately, I have a very smart friend who understands the commodities market, Stu Johnston. He understands it so well he wrote a book about it and put together a database and wrote an application to mine the database that provides all kinds of information about commodities prices and other stuff I only vaguely understand—you can subscribe to this database at Time and Timing (a trial subscription is available). Anyway, I asked him what he thinks makes sense.

We juggled the numbers, ruling out market rate, and looked at the difference between the fixed rate contract and the capped rate contract with the fee (which is 30 cents per gallon from the company we selected, which is Gault Oil of Westport). The capped price is $4.84/gallon plus the fee, or $3,598 for 700 gallons if you pay the cap. The fixed price fee is $4.79/gallon plus a $55 fee for 700 gallons, totaling $3,408.

So the difference is $200, and deciding what to do amounts to whether we want to gamble $200 that the price of heating oil will drop enough to cover the fee (and hopefully then some) or not. Stu also said we could hedge as well, but that’s more thinking that I have the energy for at this time. And he said he thinks heating oil might go down. So do I, especially if we have another mild winter.

We decided to gamble and went with the cap. And now we’re watching as the cost of oil is dropping and keeping our fingers crossed. And doing what we can to tighten up this 200-year-old sieve of a house and wishing there was such a thing as affordable solar heating systems.

After it was all buttoned up, it hit me: $3,500! That’s $700 per month just to stay warm enough so we don’t see our breath in the house and are able to move our fingers enough to keyboard. It’s tight for us—I just can’t imagine how people on fixed incomes or low income families can afford these oil prices. Electricity is just as expensive in this state ... what are people going to do?

It’s so great to have oil men in the White House, isn’t it? Did us sooo much good ...

posted by lee on 07/18/08 at 12:18 AM

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