60. The following appeared in a letter from a firm providing investment advice for a client."Most homes in the northeastern United States, where winters are typically cold, have traditionally used oil as their major fuel for heating. Last heating season t

The client writes a letter to recommend the investment in Consolidated Industries because the increase demand for heating oil and bases his suggestion on the facts of prediction of cold weather, more populations in the future and the major fuel for heating-oil. At the first glance, his assertion is plausible, however, a close scrutiny reveals its untenability.

At the first place, the client mistakenly equals the lower temperature to the more demand of heating oil. Although the region has experienced chilling weather last heating season, there was no evidence to show the demand for heating oil increased correspondingly. The client should provide more information about the amount of heating oil used in the last winter. For the same reason, without any relationship between temperature and the need of oil, it is also imprecise to relate the weather pattern in the next few years with the demand of heating oil.

Secondly, the client bases his claims partly on the predictable increase of residents in this region. The underlying assumption is more residents would consume more heating oil. The client overlooks a strong possibility that new buildings may have installed facilities which are suitable for alternative fuels rather than oil. For the reason that the fuel used in new buildings is unknown, we cannot conclude that more people will use heating oil. Furthermore, the client also overlooks the possible situation that the heating oil may be provided by committee rather than purchased by person.

At the third place, even if heating oil is traditional heating fuel in the northeastern US, it is uncertain that heating oil will be major fuel in future. Perhaps with the depletion of resources, the price of heating oil would be too high to be purchased by most residents. Or perhaps to reduce pollution, heating oil might be substituted by other clearer fuels. Without ruling out these possibilities, the author should not conclude an increased demand justifiably.

In conclusion, a better evaluation on the author’s claim requires more information about the relationship between climate and consumption of oil. The possible prospect of heating oil and more information about heating facilities in new buildings would also be appreciated.