Maine heating oil dealer Ike Libby touched the nation's heart after delivering heating oil to an elderly couple who could not afford to pay. (image: wcsh6.com)

A newspaper story on a struggling heating oil dealer’s benevolence has sparked a national outpouring of generosity for cash-strapped oil heat customers, the Huffington Post reports.

Ike Libby runs Hometown Energy, a fuel oil delivery business in Dixfield, Maine. Like countless heating oil dealers around the country, Libby is no stranger to the hardship faced by many of his customers and the difficulties they face paying winter fuel oil bills.

When pensioner Robert Hartford tried to hand over the title to his 16-year-old Lincoln Town Car in exchange for heating oil to prevent him and his disabled wife from freezing, Libby filled their tank without payment, rather than seeing the elderly couple go cold.

But he never expected the outpouring of generosity that would follow.

The story appeared on the front page of Saturday’s New York Times and appears to have struck a chord with readers across the country, many of whom immediately wanted to help.

On Monday morning, when Libby went to work, the cards, checks and credit card donations started rolling in. They now total more than $100,000 in cash to help heat impoverished customers’ homes, the Lewiston Sun Journal reports.

“I didn’t expect this to happen,” he said. “You can’t even put it into words. America’s got a heartbeat and we are hearing it.”

One of the letters read: “A donation to Hometown Energy. Good luck, thanks for caring.” It was a check for $5000.

“We struggle as a business,” Libby told WCSH. I’m getting some credit for this. [But] I’ve just been trying to do my job.”

An emotional Libby said he had set up a trust account for the money to make sure it goes to the people who need it most. Despite a near-record mild winter, heating oil prices remain stubbornly high on strong export demand, fears of supply disruptions from refinery closures and volatile world oil markets.

But those on low incomes also face cutbacks to the federal Low Income Heating Energy Assistance Program (LIHEAP), which has been slashed this year to reduce the federal deficit. The cuts mean Maine’s allowance alone has fallen from $56.5 million to $39.9 million, and has left thousands of people living in cold climates who depend on aid from the program struggling to keep up with heating oil expenses this winter.

Nevertheless, Libby has helped the Hartfords and many other Maine families struggling to stay warm by delivering oil to people he knew couldn’t afford their bills.

“I haven’t always looked out for the best interest of the business, but you know what this has been great.”

The Hartfords have just had their tank refilled. The cost came to $771.72. The receipt left on the door said it had been paid in full. Wilma Hartford, 71, said the outpouring of donations was unbelievable.

“It tells me there’s a lot of good people out there. Sometimes in this world we look at it and think this world is really going to pieces. Bad news everywhere. But this has lifted my spirits and I know there’s a few good people out there.”

Those interested in donating to the heating oil trust can contact Hometown Energy at (207) 562-8822 or mail checks to Hometown Energy at P.O. Box 485, Dixfield, ME 04224. Donations are also being accepted online via Hometown Energy’s website.

Facing Western sanctions designed to hobble its apparent nuclear weapons program, Iran is threatening to blockade a key oil shipping route in and out of the Persian Gulf, sending oil prices higher. (image: cbc.ca)

Heating Oil contracts have posted their third consecutive annual price increase, surging 15 percent in 2011, bloomberg.com reports. The bullish result came despite tought global economic conditions and has helped push residential prices to near record levels this winter.

Heating oil’s rise is being attributed to strong international demand for distillate fuels and the shuttering of refineries in Europe and the Northeast, which analysts fear will lead to supply shortages. The 15 percent price increase for heating oil futures contracts comes on the back of a 20 percent jump in 2010.

International demand for fuel oil is strong. The US exported a record 1.07 million barrels a day of heating oil and diesel fuel in October, US Energy Department figures show. About 18 percent, or 196,000 barrels a day, went to the Netherlands, the top destination for US diesel and heating oil cargoes.

Meanwhile, prices marched higher in late December amid supply fears after Petroplus Holdings AG (PPHN), Europe’s largest independent refiner by capacity, began shutting plants when banks froze $1 billion of its loans, forexdice.com reports.

And the Energy Information Administration warned last month of potential supply disruptions and price volatility in the US Northeast because of plans to shutter three Pennsylvania refineries that account for half the region’s refined fuel production.

Crude oil prices, which are closely linked to those of heating oil, also posted significant gains during 2011. Crude averaged US$95.09 a barrel in New York during the last year, up from $79.64 in 2010 and US$62.11 in 2009, canadianbusiness.com reports.

The price of benchmark West Texas Intermediate rose as high as US$113.93 a barrel in April, then dropped to $75.67 by October. Oil’s fortunes were closely linked to the year’s geopolitical and financial developments. A civil war in Libya effectively cut off the North African nation’s 1.5 million daily barrels of crude supply, sending prices spiraling up. But persistent high prices cut into world oil demand later in the year and prices came crashing back.

But oil prices have since rebounded to near $100 a barrel on Iranian threats to close key shipping lanes in the Persian Gulf if the West hits Iran with new sanctions over its nuclear program. The Strait of Hormuz is a key oil route used by tankers carrying one-sixth of the world’s oil exports. Any disruptions to this route could force world oil prices to spike to new levels.

And high oil prices are expected to continue weighing on the US economy this year as it struggles to rebound.

“It’s like leaving the parking brake on while you’re trying to drive the economy forward,” said Michael Lynch, president of Strategic Energy & Economic Research.

Investors worldwide anxiously awaited a confidence vote on the Greek government yesterday, as mixed markets sent crude prices up and heating oil prices down. (image: citywire.co.uk and Nicholas Whitaker for HeatingOil.com)

Crude and heating oil prices went in opposite directions once again yesterday as uncertainty surrounding the bailout package and austerity program that could pull Greece out of its crippling debt crisis, accompanied by weakened oil demand, inspired mixed market action.

The government of Prime Minister George Papandreou passed a confidence vote Tuesday, bringing Greece’s bailout package one step closer to fruition. The bailout program would mean more loans from the International Monetary Fund and the European Union. Economists worldwide await the approval of the package, as stabilizing Greece would likely prevent potential global economic collapse. The bailout will also hopefully bring security to European banks and good news for the oil market.

Analysts also noted that lackluster demand and negative economic news continued to affect prices, as crude prices rose 14¢ to settle at $93.40 per barrel and heating oil dropped 1.4% to its lowest level in nearly a month.

Traders said they don’t believe crude prices will go much higher, since U.S. stockpiles for this time of year have leveled out at a remarkable 21-year high. And, the National Association of Realtors reported existing-home sales have plummeted to a six-month low, another sign the U.S. recession may be far from over.

The Energy Information Administration will release its weekly report today, which analysts expect will show a modest inventory decline and a slight boost in refinery operations.

Today’s average retail heating oil price for the Northeast is four cents lower than Tuesday’s average price.

Help wanted: oil trader. Banned from work in the UK? No problem!

On Tuesday Stephen Perkins was fined £72,000 (US$108,00) by Britain’s Financial Services Authority (FSA) and banned from working in the financial services industry for five years for driving up the price of oil through unauthorized trades while blacked-out drunk. On Wednesday he was in Geneva meeting with the commodity broker Starsupply Renewables SA to talk about joining the firm, reported the UK’s Daily Telegraph. Apparently making illegal trades while drunk and then lying and trying to cover it up is a minor hiccup on the path to a successful career as a commodity trader in Switzerland.

Perkins lost his former employer, PVM Oil Futures, $10 million with his unauthorized trades, and the price of Brent crude oil gained about $1.65 in two hours as a result of his trading. According to the FSA, Perkins “is not a fit and proper person to be involved in regulated activities and his behaviour posed a risk to the proper functioning of the market,” but the British regulator can’t prevent Perkins from trading elsewhere. The agency has informed Swiss regulators of Perkins’s history.

Perkins says he has received treatment for his problem with alcohol and has stopped drinking. The Daily Telegraph interprets his quick recovery from disgrace as proof of “how valuable top brokers are to commodity companies,” which raises a question: If the guy who got drunk and lost his company $10 million is a “top broker,” what are the rest of them like?

Three centrifuges are aboard this barge and being used to clean up the oil spilled in the Gulf of Mexico. (image: BPplc via youtube.com)

Last week we reported that BP had bought 32 oil cleanup machines developed by Kevin Costner’s company, Ocean Therapy Solutions (OTS). Now those machines are in action, and BP has released a video describing in detail how the machines’ centrifuge technology works to separate oil from water.

So far the centrifuges are not a complete success—the separated water is not yet clean enough to be returned to the sea—but they’ve only just been deployed and their efficiency could be improved. To find out more about the technology and how it works with skimmers, barges, and holding tanks, watch the video below and listen to the explanations from the people directing this cleanup effort.

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(image: Nicholas Whitaker for HeatingOil.com)

The word picturesque is not often associated with the heating oil industry, but this short piece we’ve produced about a heating oil barge is that and more. I have a soft spot for oil barges. I remember a freezing cold evening in 1980, when my father took his first barge delivery at a terminal he had just purchased from Sunrise Petroleum. It was a small barge, and a small terminal, just like the one you’ll see in this film. I remember standing on the windy dock all of 8 years old in a jacket and tie, waiting for the ship to arrive. It finally did, coming in slow and low to the water, heavy with product. My mother and sister had baked the crew a plate of chocolate chip cookies, which got us a tour of the ship. It was noisy and smelly, but to my father it was the Queen Elizabeth. The ship in this piece, the Patrick Sky, reminds me a lot of that ship.

It also reminds me that this industry and our comfort depends on an almost incomprehensible matrix of people and systems–from the oil rigs of Africa and Asia, to the refineries of the Gulf Coast, to the crew of the Patrick Sky, to the oil truck driver who delivers our fuel. It is awesome to consider all the other systems and companies we take for granted in our daily lives. I hope you will enjoy (as I have) the simple beauty of a glimpse at one of the smallest and most picturesque links in the global energy supply chain.

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