Yes, it works, to a degree.

If you heat the spot you're in, instead of heating the whole home in anticipation that you MIGHT be in one of the rooms you're putting heat into, you're going to save money.

Say, for example, you burn a gallon of oil maintaining the temperature in your home at 72.

That's $2.69 or there abouts.

If, however, you forego that gallon of oil and heat the room you're in to 72 using an electric space heater...

If you have a 1,000 watt heater that runs constantly, that's 1 kilowatt per hour.

If you pay a total of 20 cents per kilowatt (price plus all fees and taxes factored in), you can heat that room for a day for the price of a gallon of oil.

No, it's not quite as simple as that, but yes, you CAN save money by spot heating.

Update: my electricity bill hasnt gone up that much and my oil usage has plummeted - I have posponed a December delivery until mid January! I am using a space heater in the bedroom at 50% of its 600 watt level - the heater also has a 900 watt option and also both switches can be on at the same time. In the TV room I use the 600 or 900 at max depending on need, but its only for 2 or 3 hours on weekdays.

I have also just used an oil ETF (Electronic Traded Fund - trades just like a stock) to buy oil at a very low level. No need to use the oil suppliers who have to charge for their price protection. I purchased the ETFs OIL and USO. If the oil price rises I sell the ETF at a profit to pay for the increased oil cost. If the price of oil drops below the $40 level where I bought the ETFs then I sell at a loss BUT ITS A TAX DEDUCTIBLE ITEM up to a $3000 amount so the Feds subsidize ones loss. One could also sell a put at (perhaps 25% below the current price) and collect the premium - and then should the oil price drop further it wouldnt be a problem buying the oil ETF at such a low level.

SPACE HEATERS ARE EXPENSIVE TO RUN!! OMG. I tried this in my own home by installing a programmable thermostat and running brand new electric heater in the rooms where we were sitting. I bought two and I paid $75 each for heaters with all the features: timer, thermostat, oscillating, energy star setting. My electric bill normally is $180 and January's bill was $440! I decided to just turn up the thermostat a little when I was home and only use the electric heaters when absolutely necessary. I just read that each heater can run $100 per month on your electric. I think it is actually more than that based on my recent bill.

Here is a link that might be useful: Lowering oil heating costs with electric space heater

This is an old one but I have used a tornado a few hours per day and it is enough to keep the room comfortable and it kept my oil and electric low. But this year, I am getting solar and I will be upping the use of electric heat.

Our problem in the Northeast is that electric rates are extremely high. Before buying a unit, caulk, weather-strip and insulate the room you plan on heating. In this way it will minimize the length of time you will need to heat that area. Wear the proper winter clothes (sweaters) to further reduce body heat loss. With the high cost, electric heaters should be used to supplement your central heating unit. Heating a room solely using space heaters would be extremely expensive. Understanding the basics of hot air, in that it rises, the type of electric unit you purchase is important. Metal is a great conductor or distributor of heat while plastic or glass will slow down that distribution. Plastic also tends to crack with high levels of heat. There is a reason why home baseboards are made of steel not plastic. Have found that convention heaters are best for heating a area for a sustained periods of time. Oil filled or metal baseboard units are convection type heaters, while preferring oil filled ones cause they continue to throw heat after they have been turned off. Last, would recommend putting a metal shelve or table, with necessary clearance, above your portable heater. The metal will slow down heat escaping right up to the ceiling and will absorb the heat to slowly redistribute. Always remember to be careful when using any electric heater both for safety and affordability.

At 21 cents /kwh I wouldn't want to be heating too much with space heaters. Plus that means the rest of your house is like a cold barn. If you only use the two rooms it probably doenst mean much. I guess I use too many rooms in my house (Office, aka spare bedroom) during the day. Wife uses the kitchen and the den. At night we sit in the living room before dinner catching up on the day, kitchen and dining room for dinner and perhaps the Den for TV .. we don't watch much TV, For me it makes no sense or cents. I heat to 68 during the day and 62 at night. Hydronic oil fired boiler. 575 gallons per year (including my domestic HW) Oil is currently 2.15/gal. Northern CT