There are many things that determine the price of domestic heating oil you pay.

  1. Market oil prices

Market oil prices are a major factor which drives oil prics up and down. Many things influence price changes for crude oil- major crude oil price determinant is supply and demand ratio. With global economic growth both supply and demand for oil grows, but that growth is not always strictly proportional. For example, in 2012, oil prices went up massively since developing countries needed much more of it than a year before, and supplier countries couldn’t make up for that growth effectively, driving a huge increase in crude oil prices. However, in 2015 growth in supply (the oil rig count) across the globe is much greater than the growth in demand, which drove crude oil prices to six year low in early December.

Other factors to influence crude oil price trends include global conflicts, international politiccal relations, severe weather events which occur in oil rich regions and some more.

  1. Season
Barrels of oil

Barrels of oil

Both motor fuel and heating oil are made of crude oil, but while consumption of motor fuel doesn’t change much over the course of a year, heating oil orders normally peak in late autumn and during winter.  During high season, prices are always higher than during low season. Once winter ends, suppliers in your area will drastically cut prices, due to need to get rid of oil for inventory equipment maintenance, and during off season, most households will be able to fill their oil tank only once.

  1. The way you order it

There are three models of ordering heating oil: cash on delivery (COD), delivery contract and hybrid contract. Delivery contracts, which include hybrid contracts, can include maintenance and even warransy insurance which will cover any damage done to your system. However, these options entail much greater prices of heating oil than cash on delivery (COD). Cash on delivery means that you will pay the lowest possible price, though you need to have funds readily available on the time of delivery. Contracts can be paid off with monthly installments year-round and this way these can act pretty much as a loan or utility bill. But if you can secure enough funds, COD will be far the best option for your budget.

  1. Weather

Whenever the outdoor temperature and other weather conditions change, so does your heating fuel consumption. If there is a drastical temperature drop and frostbites in your area, ost households will increase their heating fuel consumption. If most households use heating oil, like those on Long Island, oil delivery companies will have much work and their inventory can go empty very quickly. To prevent running out of oil for sale, they drastically increase its prices. When the temperatures happen to be unuually high at winter, the supply will be lower than normal, driving the supplier’s decision to cut retail heating oil prices. However, these short-term price changes only apply  to those who consume COD heating oil.