theamusikteater.com

The weather is warming up, but what’s going to happen when the snow flies next winter? If heating oil prices stay where they are, household expenses are going to be thrown terribly out of whack. How are homeowners going to be able to keep their family warm and fed at the same time? One answer has to be: become conversant with the futures markets, and make rises and falls in the cost of heating oil work for you, not against you. Let’s take an example. In January 2007, the wholesale price of heating oil in New York was about $1.50 per gallon. (Transportation costs add a lot to that by the time the oil is in the customer’s tank at home). Since then, prices have been on a rapidly climbing trajectory, especially so since February of this year. In January 2007, price patterns in heating oil showed a "morning star" pattern in Japanese Candlesticks terms; and that particular formation is a strong clue that prices are going to rise. If a homeowner had bought one single contract at that time, and turned it into cash just last week, he would have made a profit of almost $76,000, which would have kept him and his family warm for many years, even at today’s retail prices. The downside of the story is that it would have taken a lot of money up front to buy the contract. But several homeowners could have gotten together on a sharing basis and bought that one contract, and could have shared in the profit.