Posted on January 10 2019
Snow days are fun! (until you run out of heating oil)
As we have discussed in previous blogs over the long term, heating oil prices follow crude oil prices. But another factor is the weather. During severe weather, heating oil prices can temporarily go higher. Here’s why.
Since home heating oil is not refined here in New England, it must be transported here from refineries located in other parts of the country.
With a limited amount of storage capacity available, the larger, regional suppliers can only safely store a limited amount of fuel. For the vast majority of time, these local oil ‘reserves’ help to balance the availability of heating oil so that people feel secure in knowing that there will always be enough to refill their tanks whenever they may need to.
But when the unexpected happens – say a hurricane destroys a refinery in the Gulf of Mexico or a blizzard shuts down roads and railways along the east coast – a short-term break in the supply chain can occur, which can lead to higher than normal heating oil prices for a short period of time.
While it’s true that severe weather-related events can cause a momentary breakdown in the supply of heating oil – causing prices to rise – the specific timing of these breakdowns (during winter) is what can be challenging for homeowners and businesses.
Avoiding the Winter Blues
We recommend planning ahead and keeping your tank at least a quarter full. Look at the long-range weather forecast. And, don’t wait to fill your tank until the day before the storm. This practice ensures you don’t run out when you forget to immediately check your tank’s gauge. It also gives you a buffer during these severe weather situations. If supply is disrupted, you can wait the weather out and order once things settle down. This way you are in control and feeling quite smart and snug in your warm home.
Interested in learning more about what effects heating oil prices? Check out What Really Affect Home Heating Oil Prices?
Visit our Ultimate Consumer’s Guide to Heating Oil for everything you need to know about heating your home with #2 heating oil.