This is going to affect everyone, from Advertising Agencies to Consumers to Tech … There are going to be a rash of foreclosures and unpaid mortgages showing up in 90 days. Many of the older homes in the US are heated by $5 dollar a gallon heating oil. The problem is that many of the lock in rates people are receiving now are literally $5 dollars a gallon. Roughly 20% of American households located in the northeast use oil heat.. mostly older homes.
The Department of Energy refuses to report on what the prices are now, claiming it’s ‘not an issue’ until winter sets in and people are starting to freeze.
The Heating Oil and Propane Update is produced during the winter heating season, which extends from October through March of each year. Data for residential and wholesale prices for heating oil and propane are only collected during the heating season. U.S. distillate and propane supply data, which includes stocks, production, and demand are available at This Week in Petroleum. The Heating Oil and Propane Update will commence updating at the beginning of the next heating season in October 2008.
At some point starting in October these people are going to turn on their heat and nothing will come out. They will call the oil company to get their heating oil…. and at that point reality will set in.
We are seeing is $2,000 oil tank fill-ups, on top of their older home mortgage purchased in 2005 of $1,000 a month and last but not least.. getting hammered each day with $4 dollar a gallon gas and sky high food prices.
You are looking at an average household expenditure higher than the average income.
This is not good… not good by a long shot. Sure there are people out there going haywire on their credit cards… but this isn’t aimed for those people.. this is aimed for the people that literally are just trying to keep their house warm.
They are going to have to make a hard decision that month. Do I pay the mortgage or do I get heating oil. See it’s almost worthless to lock in the $5 dollar rates now.. because the difference between $5 dollars and let’s say $5.10 at that time will not really matter that much.. both figures are hopelessly out of reach.
These people will default on their mortgages or stop paying their rent… and at that exact moment you will see a disaster in the northern part of the country..
Mark our words… this is going to be a very cold winter for many people…. and many of these people.. they were customers of your clients.. meaning it’s going to hurt them .. then hurt your account.
This is really going to get ugly… and it’s going to make a 12 dollar lawn mower fill-up look like a walk in the park.
