If you use heating oil to heat your home, you may also be thinking about your next heating oil delivery and wondering what this winter’s fuel prices will look like. We are all feeling it at the gas pump, and like gas and diesel prices, the cost of heating oil is being driven up.
Understanding what’s behind the rise and fall of heating oil prices can offer perspective. While the cost of diesel to fuel our delivery trucks can affect our costs and your prices, that’s just the tiniest piece of the puzzle.
Here’s some insight into the factors that cause the price of heating oil to rise and fall.
What Drives Heating Oil Prices?
Several factors influence the price you pay for heating oil. Here are four of the biggest.
Crude oil: Crude oil is typically the main driver behind the price of refined oils like heating oil. Right now, however, damage to refineries in Russia and the Middle East has reduced the availability of refined oil on the global market. That means even if the price of crude oil falls, prices for most refined oil products, including heating oil, could remain high.
Seasonal demand: As we head into the heating season here in the Northeast, demand goes up, and prices follow, even in a “normal” year with no external pressures on price. People are filling up their tanks and ordering fuel more often as they run their heating systems. We always recommend filling up your heating oil tank in the spring, when the cost of heating oil tends to be lowest. That’s why we aim to secure supplies for the winter during the spring and summer, when prices are lower. We can pass those savings on to you.
Operational costs: Labor, transportation, and storage costs contribute to the price of heating oil just as they do for other businesses and industries. For example, when diesel prices rise, it drives up the cost of what we pay both to get heating oil delivered to us and to fuel the trucks that we use to deliver heating oil to you. And in areas like the Northeast, supplies may be coming from much farther away, which takes longer and costs more.
The weather: When temperatures plunge, even in another part of the country, increased demand drives prices up for everyone. This increases market anxiety about short-term supply and drives prices higher. Additionally, the weather can affect offshore drilling, for example, when hurricanes interrupt drilling in the Gulf, and drive up prices.
Ways to Save
We know how important it is to have a dependable source for heating oil that won’t break the bank. While we can’t control the market price of heating oil, we can keep our prices fair and transparent. We’re committed to delivering good value with every gallon, with options that can help you manage your heating costs even when prices are high.
Our Easy Pay Budget Plan spreads your heating costs over 12 months. That eliminates those extra-high bills that come in the winter and lets you plan your budget around regular, even payments.
The Bottom Line
When you’re choosing a heating oil provider for your home or business, price matters, but so do reliability, transparency, and service. You want a company that works to keep your costs manageable while making sure you have the fuel you need when you need it.
We’ll continue doing our part to provide fair, transparent pricing and dependable service, no matter what’s happening in the energy market. To learn more or become a customer, contact us today.
If you use heating oil to heat your home, you may also be thinking about your next heating oil delivery and wondering what this winter’s fuel prices will look like. We are all feeling it at the gas pump, and like gas and diesel prices, the cost of heating oil is being driven up.