How heating oil prices are determined?

If you buy heating oil at the current market price (as opposed to pre-buying it at a fixed price in the offseason), you have probably noticed that the cost of the fuel can vary. But why does this happen?

It happens mostly because the price of home heating oil tracks with the cost of crude oil, which is a commodity that is subject to global market forces that drive its value up or down. The cost of crude oil accounts typically accounts for almost three-quarters of the cost of home heating oil.

The other quarter of that price is determined by several factors, including:

• The weather – The northeast corridor accounts for about 90 percent of the home heating oil consumed in the U.S., so a particularly harsh winter here can send heating oil prices to higher than average levels. Conversely, a warmer winter can drive heating oil prices down.
• Competition – If many suppliers are competing for your heating oil delivery business, prices tend to be lower. Distance to port will also affect pricing.
• Policies – In a political environment that encourages heating oil production, supply will be higher and prices lower. In pro-alternative fuel conditions, demand for heating oil will probably go down, as will oil prices.

With so many variables in play, heating oil prices in Sullivan, eastern Ulster, and northern Orange counties and elsewhere in the U.S. can be nearly impossible to predict. But rest assured: when you order your heating oil from Resnick Energy, you’ll be getting it at a price that competes with or betters anyone in our service area.

Heating oil prices may be unpredictable, but the top-quality service you get when you become a Resnick Energy customer never will be. Contact us today to learn more!