The Reasons Behind Heating Oil’s Price Drop
Heating oil companies are predicting an all-time low for heating oil this coming winter. Because of this, consumers can enjoy the savings associated with reduced home heating costs. Typically, when there is a price reduction in fuel costs, most consumers question why there is a price reduction to begin with. In the following article by WPRI News, they discuss one of the reasons that heating oil costs have been lowered:
Brrr! Cold snap means scramble for heating oil
The U.S. Energy Information Administration predicts there will be a 25-percent savings this year over last year for oil heat users. Fagan said consumers will see immediate savings — but they’ll also have more resources for weatherizing their homes.
While supply and demand does drive prices, Fagan also said the location where the oil is produced — specifically the bio-diesel blend in Rhode Island — can make a difference.
“We’re able to offset those high costs just by making the fuel here in the United States,” she said.
To read the full WPRI News article, click here.
Because heating oil is being produced right here in the United States, heating oil prices have been reduced. Another reason for the drop in prices is supply. In the following article by the Wall Street Journal, they discuss how product supply has affected heating oil prices:
Oil Prices Slide on Concerns About High Product Supplies
Oil prices fell to a two-month low Monday on concerns about growing supplies of petroleum products and weak demand.
Light, sweet crude for December delivery settled down 62 cents, or 1.4%, to $43.98 a barrel on the New York Mercantile Exchange, the lowest settlement since Aug. 27. Brent, the global benchmark, fell 45 cents, or 0.9%, to $47.54 a barrel on ICE Futures Europe, the lowest level since Sept. 28.
Traders are focused on rising inventories of refined products, including diesel. Analysts have long warned that the global glut of crude oil that sent prices plunging in the past year could turn into a global glut of refined products, as refineries run at high rates to take advantage of cheap crude but demand growth fails to keep up.
Goldman Sachs warned in a note Sunday night that storage of distillates, a category that includes diesel fuel and heating oil, is at historically high levels in Europe and the U.S. If companies run out of space to store products, the bank said, prices could fall sharply lower to attract buyers.
This section was originally found on the “Wall Street Journal” website which can be viewed here.
It seems that prices have been reduced due to the high supplies. This has allowed for heating oil consumers to see a price reduction this year which is the lowest it has been in years. According to fuel companies, home heating oil prices will be low throughout the entire winter even when demand is at a higher level. This means that home heating costs will be at an all-time low all winter long.
R.F. Ohl specializes in heating oil delivery services and maintaining heating oil systems. We guarantee our work and offer the best heating oil prices in the Carbon County, Monroe County, Lehigh County, Northampton County, and Schuylkill County. Keep warm this winter by calling us and speaking with a live representative 24/7.
Contact us today or give us a call at (610) 377-1098 if you have any questions.