We know you have some questions about the price of heating oil and we hope this guide will provide you with some answers.
Heating Oil Pricing Guide
What causes heating oil prices to rise and fall?
In a nutshell it all comes down to the cost of the raw product. You see, crude oil accounts for about 50% of the wholesale cost of a gallon of heating oil. When crude prices rise or when they fall it affects everything from heating oil and gasoline to even natural gas prices.
Also, worldwide demand is rising – rapid industrial development in China, India and other developing countries, combined with the economic recovery in the U.S., has resulted in a greater demand for oil.
Finally crude oil is a commodity bought and sold by investors. In the commodities market, even a perceived change in conditions causes a heavy volume of buying and selling and this cause fluctuations in the cost of a barrel of oil.
What About Natural Gas?
Natural gas and propane prices also rise and fall for a variety of reasons. Remember, in most states where oil has a significant market share, oil has historically been cheaper than natural gas.
What can I do to save money?
We suggest you review our easy to use money savings tips page here. For even more savings, consider upgrading to a new oilheat system. One of the advantages of oilheat is that you have many retail options, but you may want to consider the following:
- When prices and supplies are volatile, that’s usually the worst time to start a new relationship with an oil dealer.
- Most full service oil dealers operate with similar profit and cost structures. Once new customer incentives end, you’re back to the regular rates, which may be higher than those of your current company.
- When temperatures are frigid, service response and fuel supply matter much more than a temporary discount on the cost of fuel.