Why are Prices Rising in a Warm Winter?

Let’s keep this short:  One of the warmest New England winters ever recorded means that demand should be low.  Low demand should mean high supply, which in turn should mean low prices (remember that Supply and Demand graph you had to stare at for an entire semester of Economics 101?).  So why are prices high… higher than we’ve seen in four years?

There are four answers.  First, a warm New England winter does not mean a warm global winter, so we have to look at the demand for heating oil around the planet, not just here.  But isn’t the entire planet warming up?  Um… no.  Even the “warmists” have changed their alarm to “Climate Change” because they can’t prove that the planet is warming.

This winter is a case in point.  New England is experiencing a really warm winter, while Europe is experience record cold.  You know those romantic gondolas on the canals in Venice?  Here’s what the canals look like this winter:

Where are the handsome young Gondoliers in their horizontal striped shirts with their bare arms?  We use less oil in New England, but they use more oil in Europe, and the average demand is about the same.

The second reason is that heating oil and diesel fuel are essentially the same product.  So when demand for diesel is high, the price for heating oil goes up.  Is the demand for diesel high right now?  Not in the US, which is in the fourth year of recession, but it is booming in Asia, which is the largest diesel consuming region in the world.  So again, even though US demand is low, global demand is up.