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Water heater is super heating water even with the dial in the ‘off’ position?

Normally I really wouldn’t care if my water heater was pumping out scalding hot water no matter what setting it’s on, however because of this we are going through $300 of oil in 2 weeks. Does anybody know why or how my water heater could be producing the hot water even when it’s off? Doesn’t make much sense to me.. Thanks!
Does a bad thermostat mean I need a new water heater? Or a super expensive repair?

Thermostat is bad

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