If you have been buying heating oil for a long time, you might notice that the price per gallon that you pay can change quite a bit from season to season – and even within the same season. But why does that happen?
The truth is, heating oil prices depend on a number of factors that are constantly shifting.
Factors In Heating Oil Price Changes:
Crude oil pricing – The price of crude oil accounts for as much as two-thirds of the cost of the fuel (marketing, refining, and profits account for the rest). Crude oil is traded in global markets, which means it is subject to many forces that make its price rise and fall.
Weather – Heating oil is subject to supply and demand, too. During an especially cold winter, when more oil is needed to heat homes, heating prices tend to go up; in a relatively mild winter, heating oil prices stay level or go down.
Competition – About 90 percent of the heating oil sold in the U.S. is supplied in the northeast; if you live in an area where there are many heating oil suppliers competing for your business, heating oil prices will tend to be lower. Proximity to shipping ports also affects heating oil pricing.
Policy – Political agendas can influence the use of home heating oil by making it more or less favorable to buy or sell oil or its alternatives.
The price of alternative fuels – When the cost to use alternative fuels rises, many homes switch to heating oil, raising demand for the latter; this increase in demand typically drives up oil prices in the short- or medium-term.
The bottom line is that each of these factors will vary – sometimes quite a bit – from year to year, making the price of heating oil impossible to predict. But one thing you can predict is that you will pay less for your heating oil when you buy it from Valley Oil.
Please note: At Valley Oil, your safety and comfort are always our priority. Contact us today to learn more about how we are working to keep your family and our crews safe and your heating oil deliveries coming in Dutchess and Ulster counties throughout this challenging outbreak of COVID-19.