Ever Wonder Why The Price Of Heating Oil Fluctuates

Home heating oil is almost a must for every home. Fuel oil is what we use to heat our homes during the freezing winter. The price of heating oil fluctuates and we are already accustomed to it. But you know why the price does not fluctuate?

Why is heating oil is very important? Heating oil is used both for residential and commercial buildings. A large percentage of homes and businesses use heating oil. Demand for heating oil is very high which is why, although the price is high, people still buy it. What some people do is buy heating oil in time before winter. For example, some of them fill up their oil storage tanks, while the price of heating oil is still low. Good for those with large storage tanks. But those with regular size storage tanks, they have to handle the volatility of heating oil price!

Sources and heating oil price fluctuations

There are two basic sources of heating oil: domestic or import. Domestic comes from local refineries, while imports means that come from other foreign countries. When the domestic refineries are unable to supply the demands for oil in the areas they will get imports from foreign refineries.

It should be noted that heating oil is actually a part of distillate fuel oil group. It means that when the domestic refineries to produce heating oil, they also produce other products. This affects the cost of heating oil during winter months. Demand for heating oil is very high, but demand for other petroleum products do not. So when the refinery to produce heating oil during winter months, they have to pay the costs lost in other products, so that the price of heating oil a little higher.

The seasonal demand for heating oil is another factor in the volatility of prices. When demand is very high, oil companies make their prices high, knowing that customers will still buy. Also you should consider the cost of petroleum as it far affects the price of heating oil. Crude oil is a major factor in heating oil. When the price of crude oil rises, so does the price of heating oil.

So do not be surprised to see the price of heating oil be changed from time to time. The change in price is inevitable. It is not just something that oil companies will do. It is actually triggered by a number of factors, such as crude oil, heating oil source and demand among many others.