How Does Weather Affect the Price of Oil

November 25, 2019

How Does Weather Affect the Price of Oil

Stretching your energy dollars is a shared concern with your other fellow home owners regardless of the method you use to keep your house warm during the long and cold winter months. We are sorry to say there are no easy solutions when it comes to reducing your energy bill; even with oil. The only way to have a significant impact on your heating bill is to use less. A reputable heating fuel oil distributor will help you reduce your oil consumption.

Cold weather can affect oil production negatively if temperatures drop low enough. Crude oil has a freezing point of between -40 and -60 degrees Fahrenheit. If temperatures drop to these depths, the supply side of oil and gas prices will be affected.

Heating oil prices fluctuate for a variety of reasons:

  • Heating oil demand is seasonal. When crude oil prices are stable, home heating oil prices tend to rise in the winter months—October through March—when demand for heating oil is highest. A homeowner in the Northeast might use 850 gallons to 1,200 gallons of heating oil during a typical winter and consume very little during the rest of the year.
  • The cost of crude oil changes. The cost of crude oil is a major component of the price of heating oil. Worldwide supply and demand determines the prices for crude oil. Demand will vary depending on factors such as the economy and the weather. Weather events in the United States and political events in other countries can affect supply. The amount of oil that members of the Organization of the Petroleum Exporting Countries (OPEC) produce can also affect world crude oil prices.
  • Competition in local markets varies. The number of heating oil suppliers in a region can affect the level of price competition in that area. Heating oil prices and service offerings can vary substantially in places with few suppliers compared with areas that have a large number of competing suppliers. Consumers in rural locations that have fewer competitors may pay higher prices for heating oil.
  • Regional operating costs can vary. The cost of delivering heating oil to remote locations can also affect heating oil prices. The cost of doing business can vary substantially depending on the area of the country where the dealer is located.

Are you heating with oil, but hesitant to switch to an all-electric system? Think it over carefully, because switching to all-electric heating could cost you big. With cold winters, a bi-energy system is a great option that can deliver the best savings and superior comfort. Find out why!

Oil heat is the safest, most efficient means to heat a home or business. Fuel oil is a very stable, non-explosive, combustible product. It addresses some of the safety concerns other fuels. The high BTU content found in a litre of oil results in the efficiency versus an equal measure of electricity, propane or natural gas.