Factors Affecting the Cost of Heating Oil

The cost of heating oil changes significantly throughout the year. Knowing what influences it can be your best weapon to plan your budget and save money over the winter months. There are several reasons why this rise and fall in prices occur; some fluctuations are caused by local sources, while others happen due to the movement in the global economy. Thus, you don’t always know what to expect when you order oil for your heating equipment. 

Burch Oil, your trusted heating oil delivery and HVAC services provider, takes a look at the various factors affecting the cost of heating oil. We’ll also touch on how you can achieve savings when you use it for your comfort needs during winter.

Crude Oil and Other Considerations

Forecasts for the global economy can affect the price of heating oil as much as the winter weather here in the local area. Here are some of the factors you need to be aware of:

• Supply and Demand

Heating oil is a refined product derived from crude oil, which is a valued commodity or raw material that can be traded in the global market like gold, natural gas and sugar. In fact, the cost of crude oil accounts for nearly 60% of heating oil costs. Since it is a commodity, its price is essentially driven by supply and demand. In other words, issues affecting the world’s supply of crude oil have an impact on how much you’ll pay to keep your home warm during the winter months.

The price of crude oil goes up when there’s an oil demand—a sign of a strengthening global economy. The same thing can happen due to decreased oil production stemming from conflicts, natural disasters, or economic sanctions imposed by certain nations. Inversely, the price of crude goes down when the global economy slows down. It could also indicate an increased production, which then increases supply.

• Seasonality

The climate of the Northeast region of the United States can be ever-changing and unpredictable, which can affect the price of heating oil. If fall and winter temperatures are warmer than average, the prices might drop. The opposite happens, however, if the heating season is colder than average. With this in mind, the best time to order heating oil for your home is usually before the cold weather begins.

• Local Competition

The level of competition between heating oil suppliers in a given region is another contributing factor why prices fluctuate. This is especially true in areas saturated with companies providing heating oil delivery services. Areas with little competition, however, may see higher prices on the products and services.

• Operating Costs

How much does it take to get heating oil delivered to your home? The price you pay for it depends on where the delivery provider is located and the costs associated with storing and transporting the product itself. A homeowner living in a rural area may have to pay more for the product, especially if the supplier travels over great distances to deliver it. Winter weather can also affect the potential price of heating oil. Outdoor conditions may interfere with production in refineries and distribution to local wholesalers and suppliers.

• Policy Changes

Changes in local, state, or national energy policies can likewise impact the cost of heating oil. If its production goes on a decline due to new regulations, the prices may increase due to a lack of supply, especially during the winter months.

How to Lower Your Cost of Heating Oil

Heating a home with oil can get expensive depending on the time of year and other factors, including the ones discussed above. In addition to this, the lack of insulation in your home and the inefficiency of your home heating equipment can lead to the cost of heating oil outpacing your budget. Fortunately, there are ways to achieve heating savings, including the following:

• Know the best times to fill up your heating oil tank.

While you could order heating oil and get it delivered to your home at any time, certain days and times are better than others in terms of service availability and savings. For example, you can fill up your heating oil tank during the last few weeks of summer before the onset of increased oil orders in the colder months. Alternatively, if you have a depleted supply of heating oil, you can stock up before the weeks surrounding Thanksgiving, Christmas and New Year when service will usually cost more.

If you want to be better prepared for the next heating season, consider ordering during the off-season. Sales for heating oil are generally low in springtime. Suppliers may offer discounts during this period, which is worth taking advantage of to gain significant savings. With that, you never have to worry about not having heating oil when the cold weather starts.

• Schedule a furnace tune-up.

The quality of your furnace could impact its efficiency and performance. Ideally, it should be clean and fully functioning. Otherwise, it may have to work harder than it should, causing higher levels of oil consumption. An inefficient furnace may also experience a malfunction, which is the last thing you want to happen during the winter months. By scheduling annual inspections with a reliable HVAC contractor, you can be sure that your furnace is in top shape.

A certified technician will check every interior component of your furnace and see if it needs repairs or replacements. However, if they determine that your furnace is past its serviceable life, they may recommend replacing it with a new, energy-efficient unit. It may be a significant investment, but the average savings on heating oil may pay for itself over a few years, not to mention the consistent warmth and comfort you come to expect in a new furnace.

You can get the best of both worlds when you turn to Burch Oil. Through our heating oil and delivery services, you can be confident in the control and reliability you have in your home’s heating system. Our high-quality heating oil is treated with UltraGuard™, which stabilizes the oil and reduces fuel-related service calls resulting from filter, strainer and nozzle blockages. We have it stored in an 800,000-gallon storage facility to allow us to commit to our promise of safety and timeliness with every delivery.

Our company also offers maintenance service plans for year-round protection of your HVAC equipment. Keep your summers cool with our AC tune-ups and winters warm with our heating system service plan. To learn more, give us a call at (301) 373-2131 or fill out our contact form.