Sunday, March 1, 2009

Natural Gas vs. Diesel

It's happended for the first time in a while. Diesel is competitive with natural gas.

Wholesale diesel is under $1.20 a gallon which places it below retail natural gas at over $1 a therm (or $10 per million Btu). If you buy gas look at your utility bill. Its significantly cheaper to go oil for the first time in four or five year.

I don't pay attention to Nymex Natural gas costs but I understand those are way down. That's good sign for commercial users buying their own gas and paying the utility for delivery. Regardless for a heating oil distributor like myself this might be a ray of sunshine in a recession as the smaller dual fuel boilers and heating oil customers see value in staying oil.

Heating Oil at $1.20 a gallon is cheaper than natural gas.

$1.20/ 131,000 btus = .000009160305344 per btu

.000009160305344 x 100,000 btu's per therm of Natural Gas = $ .916 per therm equivalent

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