Why Does The Heating Oil Price Change So Much?
Unfortunately, the answer isn’t a simple one as there are so many factors that influence your heating oil price. We’ll bring it down to 4 main factors that have a major impact on the price of domestic oil: Political; Logistical and then our beloved weather.
– Countries are constantly working to try and increase their GDP and oil is usually a sure-fire way of doing this. Recently, we seen the Organisation of Petroleum Exporting Countries (OPEC) come to an agreement to limit heating oil output which then led to an increase of 6% in your heating oil price. This week, due to Brexit speculation, we have seen the pound drop to a 31-year low against the US Dollar. Barrels of crude oil are traded in US Dollars which means a weaker pound will lead to an increased heating oil price
– This one is easier to answer and you probably already understand as to why this effects your heating oil price. Simply put if you live in a rural area the price of your oil will usually be more expensive than someone living in a more densely populated area. This is due to suppliers being based closer to where the majority of their target market is. Also there may be different issues for those living in rural areas when it comes to the delivery of their home heating oil. For example, they may need a smaller tanker to make the delivery. A small tanker means a lower fuel load; which leads to more trips back to the depot to be refilled which means increased overheads in terms of fuel etc. This causes them to increase their price to cover this loss.
– Good weather means less demand for oil. The supply remains the same however and this leads to various companies driving down their prices. This is why many money saving blogs will tell you to stock up in Summer; it’s the time when the price of home heating oil is at its lowest for the year. Then the colder months come around; demand for heating oil goes up and so does the price.
Hopefully this answers any questions you have about why the price of domestic heating oil varies so much!
Here at ValueOils.com we put the hard work in so you don’t have to. By comparing prices against our extensive list of suppliers we can get you the cheapest deal on your home heating oil! So what’s stopping you? Check out the Quick Quote section on our website and start saving money!