During late fall and winter heating oil is a worry for most households in the Northeast. The price you pay if you opt for COD oil is a result of primarily crude oil wholesale price, but it also reflects some considerations of the local market: level of inventories at each supplier, changes in demand caused by short-term weather events, quality of oil, and more.

2015/16 winter is an unusual one primarily because of an unbelievably low price of oil heat: it remains below $2 per gallon while it floated over $3 for the same period of last year. The second part of the last season saw a huge drop of retail price, and it continues to be on the lowest point for years. It’s also been a mild winter.

These low prices convinced many of those who wanted to switch from heating oil to natural gas not to do so, which would help stabilize the oil heat market and keep some suppliers still in business. Since competition remains high, retail margins are low and that’s the factor which can additionally play a role during this season. People who use cash on delivery (COD) oil can expect greater discounts or some other benefits from their suppliers. COD oil now shows its full strength as a buying option compared to fixed price or price cap contract options.

However, since weather always plays a role in demand, one should always try to maintain oil levels in their tank high. Short periods of very cold weather drive people to massively order oil to refill their tank, which usually drives prices higher. All suppliers become suddenly very busy with orders, and even if they work overtime to satisfy that demand, they may run out of oil inventory or availability in such situations, making prices of heating oil explode. People don’t want to compromise their comfort regarding a warm home. Heating oil is a price-inelastic good and that’s the only way for suppliers to try regulating the market once oil heat rush starts.

The best way to prevent bearing a huge expense of ordering COD oil is to avoid letting your tank run near empty. Suppliers can deliver you any amount of heating oil upon your call, so you should now set the 50% of tank level as critical low. It’s best to consider filling your tank every time your oil levels fall below 50% of tank capacity, which will most certainly be enough for you to survive a cold wave with a warm house. It’s now the best time to fill your oil tank and start worrying about cold waves, since you will certainly get the lowest price. If you use a heating oil price comparison website such as HeatingOilExpress.com, you can save even more by finding the cheapest supplier in your Long Island neighborhood.