How Can I Predict Heating Oil Prices?

 

At Star Home Heating Oil, we are often asked this question, and as one of the trusted heating oil companies located in the Northeast, we can confidently say that no one can predict heating oil prices – not even us!

So…what causes home heating oil prices to peak and plummet as drastically as it has over the past few years?

Well, a lot of it ties back to the price of crude oil. Crude oil directly affects the cost of all types of fuel — gasoline, jet fuel, and of course, heating oil prices. When the price of crude oil increases, inevitably the price of home oil prices will soon increase as well.

 

What Causes the Cost of Oil to Fluctuate So Dramatically?

Crude oil is used to make a variety of petroleum products such as gasoline, ultra-low sulfur distillates (also used for transportation), and jet fuel, which together account for about 80% of each barrel of crude oil. Heating oil actually makes up only a small portion of the barrel in comparison.

As a commodity, crude oil is widely affected by supply and demand. When the demand is greater than the supply, the cost of oil will go up. When supply is greater than demand, the cost of oil will naturally go down.

The biggest factor in driving up the demand for crude oil is the global economy. As of today, the United States is the biggest consumer of energy, but rapidly-growing economies like China are exponentially increasing their demand, which heavily impacts the demand for crude oil and the overall cost of oil. As you have probably surmised, this also affects home heating oil prices.

 

OPEC and Others Determine Crude Supply

OPEC – also known as the Organization of Petroleum Exporting Countries – has been predominantly responsible for controlling the pricing of crude oil across the world since the 1960s.

Since the U.S. amped up production, additional supply has helped drive down heating oil prices and other types of oil costs, which is one reason for seeing a decrease in home oil prices in recent years.

 

What Else Affects Heating Oil Prices?

Exceptionally cold weather plays a large role in affecting home heating oil prices.

Does the expression “Burning the midnight oil” ring a bell? Both the colder temperatures and shorter daylight hours of winter lead homeowners to keep their furnaces running around the clock. This means burning more fuel and therefore, requiring more heating oil fuel refills. This creates a spike in demand which consequently drives up heating oil prices as heating oil companies work harder to meet the demand.

Inclement weather like ice, snowstorms, and hurricanes also affect sources of supply.

If oil is unable to reach the terminals due to natural disasters or harsh weather, distributors and retailers are not able to obtain the much-needed heating oil supply to deliver to homeowners like you.

 

When to Buy Heating Oil

While no heating oil companies (or any other sources) can truly predict home heating oil prices, you can track the weekly average heating oil prices using the EIA Weekly Price Survey and you can also just simply shop around.

At Star Home Heating Oil we make it easy to do that with our online marketplace. Get low heating oil prices today and every day. Just enter your zip code to see the lowest heating oil prices we can offer in your area on that day. Prices are quoted in real-time. No games, no gimmicks, no hidden fees.

 

Get Low Heating Oil Prices Today with Star Home Heat