Why Are Heating Oil Prices Difficult To Predict?
If you’ve been buying heating oil for a while, you know how much its price can vary from year to year – sometimes even from month to month. The question is, why?
The reality is that heating oil prices are influenced by a complex mix of constantly changing factors.
Factors involved in heating oil price changes include:
- The price of crude oil – The price of crude oil accounts for nearly 70 percent of cost of the fuel (marketing, refining, and profits account for the rest). The problem is that crude oil is traded in global markets, which means it is subject to market forces that make its price volatile.
- Climate – About 90 percent of the heating oil sold in the U.S. is consumed right here in the Northeast – and you know how variable weather can be here. A cold winter means high demand, which typically means higher prices; during milder winters, the price tends to stay on the low end of the spectrum.
- Local and regional competition – If you live in an area where there are many heating oil suppliers competing for your business (like Massachusetts, for example), heating oil prices will tend to be lower. Distance to shipping ports also affects heating oil pricing.
- Politics – Policies and political agendas can influence the use of home heating oil by making it more or less favorable to buy or sell oil or its alternatives.
- Alternative fuel pricing – 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, the factors that contribute to the current market price for heating oil in MA are constantly in motion, making the price of heating oil impossible to predict.
One thing you CAN predict, however, is that the price you pay at Needham Oil Complete will always be as affordable as you’ll find for heating oil delivery in Middlesex and Norfolk Counties. But don’t take our word for it – find out for yourself when you become a Needham Oil customer.
Please note: At Needham Oil Complete Heating & Cooling, your safety and comfort are always our priority. Please see our COVID-19 Service Update Page to learn more about how we are working to keep your family and our crews safe, your home comfort equipment working and your heating oil deliveries coming throughout this challenging time.