What To Expect For Your Home Heating Costs This Winter

The winter is coming and for homeowners who use heating oil to heat their homes, they are wondering what kind of prices to expect for this coming winter. According to analysts, heating oil prices are at an all time low and so it is a good time to have your oil tanks filled just before the cold really starts to settle in. In the following article by CBS Boston, they discuss heating oil prices:

Home Heating Oil Prices Could Be Lowest In Decade, Analyst Says

Just last year, the average price for heating oil was about $4.24 per gallon, Kloza said. The current average is $2.43, and customers should be able to find prices close to $2 if they shop around, he said.

“That’s real money that people are going to be saving this year,” Kloza said. “This is going to be a cheap winter by any means.”

Crude oil prices continue to sink, and it’s possible they may go even lower. Kloza said it could be wise to lock in heating oil prices now.

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According to this article, oil prices are extremely low and so filling your heating oil tank will be cheaper than you may have experienced in previous years.  Heating oil is at its lowest price in the last ten years.

Usually, when there is such a dramatic price drop, consumers start questioning “why is there such a drop in prices compared to previous years?”. Consumers are interested in what drives these prices to drop. In the following article by the New York Times, they answer this question:

Oil Prices: What’s Behind the Drop? Simple Economics

The oil industry, with its history of booms and busts, is in a new downturn.

The cause is the plunging price of a barrel of oil, which has been cut roughly in half since June 2014, reaching levels last seen during the depths of the 2009 recession.

This a complicated question, but it boils down to the simple economics of supply and demand.

United States domestic production has nearly doubled over the last six years, pushing out oil imports that need to find another home. Saudi, Nigerian and Algerian oil that once was sold in the United States is suddenly competing for Asian markets, and the producers are forced to drop prices. Canadian and Iraqi oil production and exports are rising year after year. Even the Russians, with all their economic problems, manage to keep pumping.

To read the full New York Times Article, click here.

This article discusses how the increased production of crude oil is one of the principle reasons we are seeing an extreme decline for heating oil prices. It also goes on to discuss how these prices will not fluctuate any time soon. Therefore, your home heating costs for this cold season will be significantly reduced compared to previous years.

When consumers see such a dramatic decrease in prices, they tend to question how long they can expect the prices to remain stable. In the following article titled, “How long will oil stay cheap?”, by IOL – Motoring, they discuss how long we can expect to see heating oil prices to stay at these rates:

How long will oil stay cheap?

The question is worth asking because there is a tacit assumption that the halving of the oil price at the end of last year is not sustainable and that prices will gradually recover, perhaps to around $80 a barrel, though this may take several years.

That at least is the Opec position, but there is no consensus on this, for some forecasters have argued that prices will stay low for longer. Goldman Sachs is among the bears, predicting that prices will remain low for 15 years, while Barclays’ mid-range estimate is $85 a barrel by 2020, with a top range at $100. The truth is, of course, that no one can know, just as hardly anyone spotted the collapse of the price last year ahead of the event.

Based on this article, you will not be dealing with high fuel costs to heat your home for quite some time. In fact, analysts claim that you will be paying this low price for heating oil for a few years. For any consumer of heating oil, this should be good news because, unlike previous years, heating your home will cost less.

For any questions on your home heating system, contact SOS XTREME Comfort® or, give us a call at 845-351-4700. We specialize in delivering propane and maintaining propane appliances.