- Michael Fry & T. Lavis, Over The Hedge, 5-9-04
In the past several past years we have not always promoted CAP plans because on average for the last 20 years customers on CAP programs fared no better than those on market price and when adding the hedging cost they may have had a higher true cost.
Currently two major market forces unrelated to fundamentals of supply and demand – the weak U.S. Dollar, and market speculation by Wall Street are raising havoc with prices. A Congressional study by Sen. Carl Levine concluded that as much as 40% of the price of crude oil is attributable to excess market speculation. With crude trading well over $100.00 per barrel that equates to roughly $1.00 per gallon, factoring in the weak U.S. Dollar we could all be paying $1.50 or more per gallon because of these two anomalies!
Uncertainty over how/ when or if our government will correct these issues make CAP programs for the 2008-09 season attractive. Corrective action by Washington could cause prices to drop precipitously in a very shot time period. Having Downside Protection on a CAP program would be essential if that were to happen or you would be locked into a much higher rate than market conditions would dictate. With volatility so rampant, what better way to have the best of both worlds? A maximum price you can budget for and the benefit of full down side participation when the price goes down. It will go down the only question is when and how fast and far.
For 2008-09 heating season you can choose from four plans………………
• Budget CAP
• Budget Fixed Price
• Pre-Buy
• Market Price
Please call us if you have any questions, need to know your consumption from prior years or to find out how to enroll in the program of your choosing. Or easiest of all, download the pdf and mail it in and your contract will be in the works faster.
Participating customers on all plans must be on automatic delivery. This is a limited time offer based on the gallons we have optioned and is available on a first-come, first-served basis. Please call us if you have any questions, need to know your consumption from prior years or for easy enrollment in the program of your choosing.
Program Period: June 1, 2008–May 31, 2009
Early termination penalties apply.
