Heating Oil Prices – Will the stuff ever get cheaper?

Heating oil prices have always been an important thing to consider. A lot of people used heating oil in order to heat their homes due to the low oil prices too. This is a petroleum based product and its prices fluctuate from year to year. The oil prices are usually a lot higher during the winter time as the demand grows. In order to understand why the prices vary so much from one region to another or from one year to another one has to understand how this product is being produced and used. The majority of this fuel is being used for heating households and that is why the demand, and thus the prices, is highly seasonal. The Northern regions are usually the ones where heating oil is mostly used during the cold season, thus you will find the highest prices here.

Heating Oil Sources

There are different heating oil sources that mainly include domestic refineries or foreign imports from countries such as, Middle East Countries, Canada, Russian or Venezuela. The issue is that the domestic refineries are not always able to produce enough heating oil and sometimes the inventory remains low during the winter time while the heating oil prices burst. Producing more heating oil in the refineries is not always the solution as by producing heating oil they should also make other products, such as gasoline that may remain unsold for a longer time, a thing which may disrupt the economical balance.

Different Prices in Different Areas

Heating oil prices are mainly determined by the costs of crude oil. To these costs there are other expenses that are being added, such as production, marketing and distribution costs. It is also important to note that the refiners will have to add their profit to the finite product. During the last couple of years the distribution and marketing costs were fluctuating somewhere between 40 and 45 percent out of a gallon of heating oil. The prices vary, of course, also depending on the area where you live. There are a few things to keep in mind while trying to establish why oil prices are so different in different regions. The seasonality is a very important factor and, as we mentioned before, during the cold season the Northern regions use a considerably larger amount of heating oil than the rest of the world. The price of the crude oil may also vary, thus the heating oil prices will also fluctuate. Another very important factor that may decide the prices in your area is the competition on the local market. If there is only one supplier or dealer in your region, the prices may be higher due to the lack of competition. Also, the costs of transportation will influence the outcome of the heating oil prices. You can find out more information about the exact prices in your area by contacting the local suppliers.

Heating Oil Alternatives

It is understandable that when the prices of a certain heating fuel significantly rise in comparison with other such fuels, one would consider switching. It is true that this may be a challenge for the regular home owner, but, in time, it will pay off in case there is an alternative available. Because of the increase in the heating oil prices, more and more people from the North-East are considering using natural gas or even electricity as residential fuel choices. You may find these alternatives quite attractive especially because they will save you a few hundreds during the winter time and you will not worry about the dangers of keeping an oil tank near your house.