Crude oil prices have dropped dramatically in the last six months, and right along with crude oil, heating oil and propane prices have dropped, too. A welcome relief!
However, do not hesitate to fill up your oil tank now. Prices are low today, but there are many unforeseen events that can cause crude oil prices to rise and subsequently increase the cost of heating fuels. The world can be a volatile place. Following are just some of the factors that can affect the cost of crude oil and, as a result, heating oil and propane:
- Economic affairs
- Weather conditions
- Supply and demand
- Natural disasters
- Regional conflicts
Even though heating fuel and gasoline are both distilled from crude oil, they are two very different beasts. They have different distribution systems and the supply and demand for the products vary greatly. Gasoline is used nationwide and all year-round, whereas heating fuel is in demand seasonally and regionally.
There is no way of determining where the cost of heating oil and propane are headed. Industry experts can only offer opinions on how the many factors involved in the distilling and distribution of heating fuel will result in the cost of heating homes and businesses. Besides market demands, typically, heating oil and propane prices are lower in the early part of the heating season because the oil industry starts to run out of storage space and needs to offload their product, and demand for heating fuel is significantly lower.
Besides the many factors that affect the cost of heating fuel, you should be aware that in addition to the market rate, vendors often offer discounted pricing as part of their strategy to attract new customers. Their offerings may include discounts for new customers, seniors, vets, or volume pricing, just to name a few. Not only that, but be aware that many vendors will negotiate. You may want to get quotes from several different vendors and then use the pricing information you gather to help negotiate a better price from your vendor of choice. Remember to ask each vendor:
“Is that the best price you can offer?”
Don’t forget to check with your vendor throughout the season. Crude oil prices may keep dropping, so think about calling your vendor periodically to ask if they can offer a lower price the next time they fill up your tank
In short, don’t hesitate in filling up your oil tank for this winter's heating season. Heating fuel prices are lower than they’ve been in months.
Click here to find a comprehensive list of heating oil and propane vendors you can call to compare pricing.