A Question Our Heating Oil Customers Ask Us Every Year…
One of the most common questions we hear from our heating oil customers every year is “why are heating oil prices so crazy?”
As you may have noticed, the price you pay for heating oil can change – sometimes quite a bit – from one heating season to the next (or even from one month to the next).
This volatility is a result of the many constantly-changing forces that come together to influence the market price for heating oil. Here are a few of the more important ones:
- Crude oil pricing – The cost of crude oil is typically responsible for more than half the cost of heating oil (marketing, refining, and profits account for the rest). The challenge with crude oil is that it is traded as a global commodity – which means it is subject to many market forces that make its price so volatile.
- Weather – More than 90 percent of the heating oil used in U.S. homes is consumed right here in the Northeast, so the weather we’re getting here in our region and beyond has a big influence on heating oil prices. In an especially cold winter like our last one, heating prices will go up due to increased demand (and, in some cases, constrained supply); in a relatively mild winter, heating oil prices may stay level or even go down.
- Competition – If you live in an area where many heating oil companies compete, heating oil prices tends to be lower. Proximity to shipping ports also affects heating oil pricing.
- Policies – The law and political agendas can encourage or discourage the use of home heating oil; if demand is expected to decline as the result of a new policy, heating oil prices will probably increase as production slows.
- Other heating options – 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.
As you can see, each of these factors is in constant motion, making the price of heating oil impossible to predict; anyone who tells you otherwise is not being truthful with you.
But one thing that IS predictable is that the price you pay for heating oil as an Ehrhart customer will always be fair and honest. That’s our promise to you. And we back that promise with expert, friendly service, reliable heating oil deliveries, and convenient services like Smart Pay and AutoPay to 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 us. Contact us today to become an Ehrhart customer and see for yourself.