Why Do Heating Oil Prices Change So Much?
One question our customers ask every year is “why do heating oil prices change so often?”
It’s an understandable question.
Factors In Heating Oil Pricing
Mostly, the volatility of heating oil prices is the result of the constantly-changing factors that determine the market price for the fuel. Some of these include:
- Crude oil pricing – The price of crude oil – a commodity traded internationally and subject to complex market forces – accounts for as much as 70 percent of the cost of the fuel (marketing, refining, and profits account for the rest).
- Weather – Since more than 90 percent of the heating oil used in U.S. homes is consumed right here in the Northeast, which means that weather can have a big impact on its price. Severe, lingering cold can have an immediate impact on oil prices as demand grows and local supplies become scarce.
- Competition – If you live in an area where there are many heating oil suppliers competing for your business (like here in the Catskill region for example), 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 cost of alternatives – 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.
Each of these factors will vary – sometimes considerably – from year to year or even from week to week, making the price of heating oil impossible to predict; anyone who tells you otherwise is not being honest with you.
But one thing that IS predictable is that the price you pay for heating oil as a Black Bear customer will always be fair and honest. We back that promise with affordable heating oil service agreements, reliable heating oil deliveries, and convenient payment options that lighten the load during heating season.
We can’t predict the price of heating oil – but we do guarantee you’ll always get a fair price on every single gallon you buy from Black Bear. Contact us today to become a Black Bear customer and see for yourself.