When Is the Best Time Of Year to Buy Heating Oil?
Excellent question!In order to try to answer that very good question, we graphed the last 11 years* of heating oil prices using the average price of heating oil in New England as published by the US Energy Information Administration. The EIA publishes the average price weekly during from October thru March, when it’s cold and you need heat.
To make it a little easier to decipher the spaghetti, we’ve color coded the lines. Each line represents the heating oil price by week for one heating season year. The red lines represent years the price went up, yellow represent years that the heating oil price went down and orange is one year that the price was relatively flat.
In 11 years, the price of heating oil went up during the heating season 7 times, down 3 times and one year was flat. Might you conclude that since the price only declined 27% of the time, that it is a good bet to buy as early as you can? - Depends.
The majority of years heating oil prices went up in the winter
The long-term price of heating oil is very dependent on the price of crude and in the short term the weather. So, if you think crude prices will either go up or remain stable this winter, then yes, it’s better to fill up now, then to wait for the winter to come.
Can heating oil prices go down in the winter?Definitely. If you look at the chart, you’ll see that prices in the winter of 2008-09 dropped by almost $2 a gallon. Once again, heating oil prices rose to $4 as crude oil prices climbed dramatically and then heating oil prices plummeted right along with crude oil.
What the heck happened and should I be worried that could happen again? Crude production slowed in the middle east at the same time that global demand was surging from growing economies, especially China. With short supplies, huge demand, and a lot of speculation, the price of crude hit a staggering record of $148 per barrel in July of 2008. The 2008 recession hit and crude oil demand decreased across the world. The price of crude oil went from a high of $148 a barrel in July to a low of $32 in just six months.
Well, you’ve probably noticed in recent years we’ve been enjoying low heating oil prices. That’s because the price of crude oil continued to drop from $115 per barrel in June of 2014 to under $35 per barrel in February of 2016 as supply from OPEC, Russia, and the US grew faster than demand. Heating oil prices in New England followed crude oil prices down to around $2.00 per gallon in 2016.
That was then, what about now - where are oil prices headed?
However, the price of heating oil and crude oil has been steadily rising through the last two heating seasons. As we start the 2018-19 heating season, crude prices are just below $70 and the average heating oil prices are right about at the mid-point between the high’s and the low’s of the last decade.
Where will heating oil prices go from here?Not to sound like a broken record, but it really depends on what happens to crude prices. If the global economy keeps chugging along, and demand for oil keeps increasing, then crude prices will stay at current levels or go higher. If the economy slows, and demand for crude oil decreases, or if supply increases above expectations, then crude oil prices will decrease and heating oil prices will decrease with them.
So what can you do to buy heating oil at the right time?You can watch price trends by using our instant price check and stay informed. We’ll publish a weekly update on price trends – so you can see where heating oil prices are going and how they compare to crude oil prices. You will also be able to see how Heatable’s heating oil prices compare to the Maine and New Hampshire state averages.
While we can’t predict the overall direction of heating oil, we can predict that Heatable’s price will be lower than the state average. If you want to be smarter than average just enter your zip in the price checker to see today’s super low oil price and place an order. Heatable makes ordering heating oil as easy as one, two, three (clicks, that is)!
To know when to order heating oil for your home, be sure to check out When to Order Heating Oil.
Visit our What Really Affects Home Heating Oil Prices? for more details.
Learn more about Heating Oil
Visit our Ultimate Consumer’s Guide to Heating Oil for everything you need to know about heating your home with #2 heating oil.Stay cozy out there!
The Heatable Crew
* Why 11 years and not 10? Because we wanted to capture the complete “oil shock” period of 2007-2009