What affects home heating oil prices?

Many customers contact us and ask “Hey, what’s up with heating oil prices? What’s behind these price changes?”

The price of heating oil is affected by both global and local forces - forecasts for the global economy can affect the local price of heating oil as much as a really cold New England winter. If you’d like to dig a little deeper into what those forces are, read on!

It’s a crude, crude world

The fact of the matter is, the price of crude oil accounts for the majority (58%) of the cost of heating oil and therefore has a large impact on the price. Just check out the graph below. Kind of says it all. Because crude oil is a commodity (a raw material that can be bought or sold), its own price is driven by the law 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 in the winter.

So what drives the price of crude oil?

To understand crude oil pricing, we’ll need to take you back to your high school economics class (we hope bringing you back there doesn’t trigger bad memories). Since crude oil is a commodity, its price is essentially driven by supply and demand. More demand than supply and the price goes up. More supply than demand and the price goes down.

What makes crude oil prices (and heating oil prices) go up?

• A strengthening global economy – which increases the demand for oil

• A decrease in crude oil production (either voluntary, due to sanctions, conflicts, or natural disasters) which decreases supply

• A slowdown in the global economy – which decreases the demand for oil

• An increase in global crude oil production which increases supply

Besides crude, what else can affect heating oil prices?

OK, if 58% of the price of heating oil is driven by crude what drives the other 42%? That’s where local forces come into play. Some of these local forces include the number of heating oil providers in a market, labor costs, transportation and storage costs, and the weather.

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.

Why Heatable?

Heatable’s the smart way to order oil! Our website and quick order app put you in control of your heating oil purchases. You can order anywhere and at any time. Just enter your zip to see your super-low price and get started.

We provide lower prices for all! Heatable is committed to providing consistently low heating oil prices. Our technology and streamlined process allow us to offer the same low price to everyone – no negotiating necessary.

We’re heating oil superstars! Founded by industry veterans, we’ve been around the block (literally hundreds of thousands of times). We have our own fleet of bright orange trucks, and we make our own deliveries.

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