Heating Oil Price

Refining petroleum or crude oil produces heating oil. Residential use for heating accounts for most heating oil consumption; close to 8 percent of American homes use heating oil.

Like gasoline and diesel prices, heating oil price depend to a large extent on the supply and price of crude oil. If there is too much crude oil available in the marketplace, oil price, including heating oil price, fall. A crude oil supply shortage, alone or combined with increased demand for crude oil products, drives heating oil price up. Local market factors also affect the price of heating oil. If a heating oil supplier sets its prices too high, consumers may switch to another supplier. When enough revenues are lost from customers who leave, the supplier will be under pressure bring prices more in line with those offered by competitors.

Heating oil price tend to go up seasonally, with prices being highest during the winter. This is because consumption of heating oil rises as it becomes colder. Extremely harsh weather conditions may also have an adverse impact on supply routes. Thus, if a part of the country experiences an unusually mild winter, heating oil price may be reasonable. However, if winter is harsh, prices can rise quite dramatically. Another reason for higher heating oil costs is the high cost of transportation to more remote homes.

Many oil suppliers offer fixed price schemes to help consumers control the costs of using heating oil. Installing better insulation can also keep heating costs down. For lower-income families, there are some federal, state and supplier-supported programs to make heating oil more affordable. Some consumers try and avoid seasonal increases in heating oil price by filling their tanks during the summer months, when prices are lower.

Why Do Gas Prices Keep Rising?

How does the price of oil affects the price at the pump ?

First of all, the most commonly known reasons for high gas prices are supply and demand, disaster, war. But, what is happening now is a result of the price of OIL FUTURES which are traded on the commodities futures exchange. The prices change daily depending on what the investors decide or think the price of oil will be in the future.

So, what is Oil Futures you ask? It is really pretty simple. This is an agreement to purchase or sell oil at a set price on a specific date (in the future). The traders/investors (or speculators as they really are) look at the reported projection of supply and demand to come to a price and then bid on the price of the oil futures based on what they think the oil will be trading at.

In the long haul, when the speculators think the prices will be high, they then choose to bid high, thus a self-fulfilled prophecy, high oil prices without an oil shortage! This then creates a windfall, waterfall effect and other investors follow suit.

Crude oil accounts for about 55% of the price of gasoline. The remaining costs are split between taxes and distribution. So, when the traders bid high and sell high, we pay for it at the pump.
There are some ways to save on you gas and fuel costs. Don't think that your hands are tied. You do have some options on saving at the pump and getting the most out of the gas you purchase. Investigate these options as there seems to be no light at the end of the tunnel on gas prices. !

Heating Oil - The Price Will be Enough to Leave You Cold

If you think the price of gasoline is high, wait until the first cold snap of the season. Typically, home fuel oil is a seasonal product but the price is definitely tied to the overall cost of crude oil. As the price of the raw material is now at an all time high, we can expect heating oil to also go up substantially from last year.

In many places the price of home heating oil is equivalent to the price of gasoline. This is interesting as the price of gasoline typically has between 45-55 cents in transportation taxes built into the price.

Heating Oil is a product that is actually created in the off season in the refineries that make gasoline during the winter. The way this works is simple. An oil refinery doesn't make any money unless it's making product. Even going full bore 100% of capacity which is almost impossible, the oil refineries throughout the country are unable to meet the demand for fuel or heating oil during the winter and gasoline in the summer. The answer to this dilemma, while also recognizing the need to keep the plant operating at peak efficiency is to make heating oil in the summer and store it in tanks for deliveries in the autumn and winter cold seasons. They also do the same in the colder winter months by manufacturing gasoline for use in the summer. This allows the oil company to keep the refinery operational while also turning out the products we depend on every year.

The one problem with this is that on top of the price of crude oil, they also need to guess right about the demand. To much fuel oil or gasoline at the end of the season and they lose money. To little and the price goes up even more. To make matters worse, they also need to base demand on the weather which as we know is unpredictable at best.

You can do you part by being as fuel efficient as possible when using either product. Consider a campaign of finding the drafts in your home and fixing them. Use blankets and heating pads to keep everyone warm in the evening. Turn down the thermostat at night and save even more. Quit heating that spare bedroom and put a towel at the bottom to limit cold air from entering the heating parts of your home. The less heating oil used, the less upward pressure on the price and the more we all save.

Abigail Franks writes on a variety of subjects which includes home and family