Heating Oil Prices Explained
For almost a century now, homeowners in the U.S. have relied on oil for heating. It has been that way for a very long time for good reason. Well, there actually are more than a couple of reasons why heating oil remains popular and preferred, even though there already are a handful of other alternatives such as propane, natural gas, electricity, geothermal, and radiant heating. In the past, the preference on oil may be attributed to the fact that there were no other feasible and readily available options, and everyone was using it even though there was a ton of environmental issues caused by carbon emissions. But today, a lot has changed and those changes are for the better. One of the most notable of those changes as of late are the stability of home heating oil prices.
For majority of residential settings in the U.S., there are four main factors that affect the retail price of heating oil. These are the cost of crude oil for refiners, cost for refiners in the production of oil for heating, distribution and delivery costs, and profits. For a period of ten years or a decade, starting in the winter of 2005 up to the winter of 2015, crude oil was responsible for a little over 50% of the average price of a gallon of heating oil. This fact is experienced in the winter months of October up to March. Therefore, the price of oil for heating obviously depends a lot on the price of crude oil, to where it is derived. Next to crude oil costs, the second biggest factor that affects heating oil prices is the distribution, delivery, and marketing costs, along with the concern of making profit. Those things accordingly account for about 28% of the cost of a gallon of heating oil. Finally, 16% is attributed to processing costs in the refinery. |
Reducing Heating Oil Expenses
There are several ways for you to avoid high heating oil prices and they are all legitimate. Most of these strategies are more like clever ways to go around the usual trend. For instance, you can purchase oil and fill your tank in late summer or maybe at the start of the fall since prices are expected to be lower. Another way is to look for heating oil delivery companies that offer customers a unique budget plan for them to be able to pay the monthly heating oil bills based on how much they can afford. And finally, there are those fixed-price protection programs intended to protect you from possible surges in the price of heating oil.
Aside from choosing payment plans and purchase strategies, you can also significantly reduce your expenses on heating oil by lowering your consumption of it. Start by keeping your system in tiptop condition, since a heating equipment that’s improperly maintained will use more oil to generate heat. Follow it up by doing some weatherstripping and sealing all over the house, along with installation of proper insulation, both in the walls and attic.
There are several ways for you to avoid high heating oil prices and they are all legitimate. Most of these strategies are more like clever ways to go around the usual trend. For instance, you can purchase oil and fill your tank in late summer or maybe at the start of the fall since prices are expected to be lower. Another way is to look for heating oil delivery companies that offer customers a unique budget plan for them to be able to pay the monthly heating oil bills based on how much they can afford. And finally, there are those fixed-price protection programs intended to protect you from possible surges in the price of heating oil.
Aside from choosing payment plans and purchase strategies, you can also significantly reduce your expenses on heating oil by lowering your consumption of it. Start by keeping your system in tiptop condition, since a heating equipment that’s improperly maintained will use more oil to generate heat. Follow it up by doing some weatherstripping and sealing all over the house, along with installation of proper insulation, both in the walls and attic.