Fuel & Heating Oil News
What is Changing the Price?
Heating oil is traded on the commodities market, which means that the cost of heating oil is subject to fluctuations, just like the stock market. When watching the stock market, the price of Crude Oil has the biggest impact on the price of wholesale heating oil.
What determines the barrel price of Crude Oil? The following factors are used to determine oil prices:
- The barrel price is affected by supply or inventories recorded by OPEC. If suppliers believe that supply will decline, they bid the price up.
- Oil reserves. The United States, as well as Saudi Arabia have large reserve capacities. If prices get too high, these reserves can be “tapped” and in turn traders allow the prices to fall.
- Oil demand is another obvious answer.
- Another major factor you will find, is any disruption in the world that may affect an oil producing country. If there is conflict in one of these countries, traders will anticipate that this crisis will limit the supply. The 10 largest oil producing countries are:
*Russia *Saudi Arabia *United States *China *Iran *Canada *United Arab Emirates *Venezuela *Kuwait *Iraq
- Finally, natural and man-made disasters can drive up the price of oil, if they are dramatic enough.
Below, we will try to update you as prices fluctuate to help explain why. If you have any questions, we will certainly do our best to answer them.
What is the difference between Regular Heating Oil and Low Sulfur Heating Oil??
As of July 1, 2014, the State of Massachusetts and the State of Vermont are requiring heating oil dealers to sell only low-sulfur fuel, which was already required in other states, such as New York and several other northeast states.
“Low sulfur oil reduces air pollution emissions, while extending the life of a furnace or boiler’s heat exchanger and reducing the need for cleanings and maintenance.” – www.wptz.com
As of now, New Hampshire is the only New England state which has yet to propose or enact a law to require lower amounts of sulfur in heating oil. – www.rutlandherald.com
There is a slight cost difference between the regular heating oil and the low sulfur heating oil. As of 7/3/2014, the difference is approximately $0.05/gallon. However, this additional cost in fuel should be offset by reduced maintenance with a cleaner burning fuel.