A recent cold weather snap and low fuel prices might be the reason why some area retailers had to travel to Syracuse for home heating oil recently.
Some began commuting to Syracuse and other locations last week after they were told by regional distributors that more home heating oil would not be available here through the Buckeye Terminal pipeline until Wednesday.
Some consumers who use heating oil to warm their homes might have seen a short-term rise in costs as retailers tried to offset their traveling costs.
The article goes on to explain the errors of forecasting and greed (some people held off buying until it was too late because they thought that prices were going to fall even further) that led to these problems.
But I think they may be missing something. I know of a certain hospital in upstate New York that has what they call interruptable gas supplies. What this means is that they are charged a lower price for their natural gas in exchange for guaranteeing that they have enough oil on hand to switch over to fuel oil at a moments notice.
Well, it just so happen that they had a problem with a pumping station on one of the natural gas pipelines that serves the upstate area in late December. This necessitated shutting down the pipeline for an extended period of time (it just recently got back on line). So this hospital and every one else who had interruptable gas supplies were told they had to switch to fuel oil as fast as they could be required to by contract. And the hospital was told that if it was at all possible for them to switch faster they should pretty please do so. This was done so that the natural gas suppliers could insure that there would be enough gas for those with uninterruptable gas contracts.
What this meant is that the hospital suddenly started burning thousands of gallons of fuel oil a day during the coldest part of the year. Naturally the hospital had enough fuel oil on hand that this was no problem. But they did not want their stock of fuel oil to shrink because nobody knows what is going to happen in the future. Thus, tractor trailer loads of fuel oil were being delivered to this hospital every couple of days.
Multiply this by all the other places that had interruptable gas contracts and you had a huge hit to local oil supplies at the same time a cold snap hit the area.