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Arthur Conan Doyle Arthur Conan Doyle is offline
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Default Next winters propane prices

IGot2P wrote:

What? The average wholesale price was $.639 as of 03/30/2015. I would
say that would give them some room for delivery.


If they are purchasing the propane today, yes. But you still have to account for
storage costs. Plus, this time of year is the cheapest for propane as the
heating season has ended. Next fall, prices will be higher. How much higher is
an open question.

You don't know if the supplier is going to contract for propane next fall, what
the fall futures price is, or if the supplier is betting that the prices will be
as low as they are now and plans to take the risk.

Bottom line - if you are dealing with a large, established supplier who has a
track record for this kind of deal, it may be a risk worth taking. If you are
dealing with a small supplier with a 100 residential accounts and a single
truck, the risk is different. If you annual uage is 900 gallons, I'd think about
buying another 500 gallon tank and filling both now. That way you can always
fill at the end of the heating season at the lowest seasonal cost.