Fall on central Long Island can sometimes turn into second summer, with balmy days lingering into October. Of the many benefits is that you don’t need to think about heating your home—but those last warm days can be a good chance to get those lingering lower prices on heating oil before temperatures start falling, and the price of heating oil ticks up.
Of course, there are other factors that affect the price of heating oil besides the temperature. Geopolitics will affect the price of oil, as will events that put pressure on the supply chain, such as the collapse of a bridge blocking access to a major port, or a major hurricane that damages refineries. Most of those things are impossible to anticipate, but in general, here’s what determines the price of heating oil:
There are four main factors that affect the price of heating oil.
Heating oil is derived from crude oil, which is why the price of crude oil has the largest impact on the price of heating oil. Because crude oil is a commodity—a raw material that can be bought or sold—its price is driven by the laws of supply and demand. That means the global economy and any issues that affect the supply of crude oil will affect how much you pay to heat your home.
Heating oil prices always go up in winter, when demand peaks. On the other hand, in summer, heating oil prices are at their lowest. We do our best to secure supplies for the winter when prices are low so we can pass those savings on to you, particularly through our pre-buy and fixed price plans. And, it’s why we recommend filling your tank in the off season, to take advantage of lower pricing.
Labor costs, transportation, and storage costs contribute to the price of heating oil just as they do for other businesses and industries. For example, when gasoline prices rise, we have to pay more for the oil that’s delivered to us and to run the trucks that we use to deliver to you.
Just like seasonal demand, the weather plays a fairly predictable role in heating oil prices. When temperatures plunge, even in another part of the country, increased demand can drive prices up for everyone. And, in areas like the northeast, supplies may be coming from much farther away, which takes longer and costs more. This increases anxiety about short-term supply and drives prices higher.
Ready for a fill-up? Even though it still feels far from winter, if you fill up your heating oil tank now, you’ll be golden when the first real cold snap hits, and everyone else is calling for a convenient heating oil delivery appointment.
When you’re looking for a heating oil provider for your home or business, you want a company that puts customers first. That means offering true reliability, with products and services designed to make your life easier. To learn more or become a customer, contact us today.