SalemNews.com, Salem, MA

Business

October 17, 2012

Q&A: Oil prices may moderate this winter

Dick Stocker’s dad, Theodore, purchased Stocker Oil Co. in 1940 and ran it for 35 years before the younger Stocker took over. Stocker said he actually purchased the business from his father while in his senior year at Northeastern University.

“I’m still at my last co-op job,” he quips.

More than a year ago, Stocker, a lifetime Peabody resident, moved the business to Route 1 in Topsfield. His two children, Mariel and Adam, are working for the business, which runs five fuel trucks and six service trucks.

Given the high price of oil, Stocker has seen a lot of his home heating customers convert to natural gas.

However, Stocker notes that the price for natural gas also moves up and down. He’s also a small businessman dealing in a commodity whose price on world markets can change rapidly, so Stocker is constantly reading up on what is affecting the price of oil.

“We do the best we can to try and even out the prices,” Stocker said. “You buy a product and deliver it for a fee. It’s the added service you add to it that makes the difference between one company and another. We try to be the company you can depend on and trust.”

Staff writer Ethan Forman can be reached at 978-338-2673, by email at eforman@salemnews.com or on Twitter at @DanverSalemNews.

What is your take on the oil market?

It shows some weakness, then something happens on the international front that keeps it up to all-time highs.

What are the price trends you are seeing?

The long-term trend is for softening prices, and it’s not that much, and it’s very volatile, and we can see price changes sometimes a couple times a day. ... If something happens in Saudi Arabia, the price we pay now would probably be different.

What is the reason for this volatility?

It’s a commodity. It’s traded worldwide. Most of the action in the market is not from people like us, or companies that take delivery of the oil, it’s investors.

As a small dealer whose territory covers Essex and part of Middlesex County, do high oil prices impact you?

Obviously, we prefer them to be lower because it would be easier for customers to pay bills. ... Most people we set up on budget plans. (Stocker noted that the price of home heating oil now is 30 cents more than it was in the spring.) We tried to fill as many tanks as we could early in the summer because we thought it would be the case.

What are some of the things that influence price?

There are all kinds of things, I read all about this. There are factors that go into it. It’s not the heating oil, but the demand for distillate fuel (diesel fuel). ... New York state has already mandated that the only fuel that can be sold in New York is ultra-low sulfur. ... Massachusetts had a mandate for that, but the mandate goes into effect in 2014.

What are trends with natural gas being so inexpensive that may affect home heating oil?

The general trend now is large trucking companies are beginning to change their fuel to natural gas. (Stocker said that may mean less demand for diesel in the future and lower prices for home heating oil.) The hope is the price will not rise any further, barring anything unforeseen in the Middle East. ... Supplies are down, but demand is down.

Is the low price of natural gas affecting you?

We’ve lost a huge volume because of natural gas conversions.

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