As home heating oil prices drop, should you lock in?

August 31, 2010 2:42:15 PM PDT
It's 90 degrees out yet, John Depken is busy talking home heating with his customers. He owns Keller Depken in Passaic.

It's a full service company that delivers fuel oil throughout Northern Jersey.

"It's a good price right now. It's stable. It looks to be getting better, but you never know what happens," he said.

Oil prices dipped Tuesday because of two things: huge supplies of petroleum products and the struggling u-s economy regained the focus of investors.

The average retail heating oil price in the northeast was one cent lower than Monday's average price.

The price of crude is on its way to a 7 percent drop during august after rising in June and July, according to the website

But Depkin says beware.

"Locking in has not worked well for the consumers or the companies in the last few years. The market is steadily going down, so if you lock into a price you're stuck with that higher price," he said.

But analysts say it looks like prices will drop significantly Wednesday, thanks in large part to supply.

"Over inventory is currently at a five year high - gasoline and fuel oil - which can't really hurt us in the long run unless we have excessively cold weather. It looks good for this winter," Depkin said.

Depkin says it's ok to top off your tank, but don't jump for joy yet. Instead, plan ahead.

"Upgrade. Save yourself fuel. We like to save our customers fuel. It helps the economy. It helps the customers. We want happy customers."

A little money up front could save you in the long run.