How Are Heating Oil And Propane Prices Calculated Anyways?
Weather, geography, and politics are just some of the factors that affect heating fuel supply, demand, and pricing
Heating oil and propane prices are important to residents of NH, MA, VT, and ME because New England is the most popular region in the United States to heat by oil. Furthermore, our harsh and often prolonged winters keep us paying to heat our homes for longer than we would like. Therefore, heating oil prices become quite a topic of discussion for a good portion of the year. Even if you heat your home with a different fuel—such as propane, kerosene, or diesel—the prices of these fuels are heavily influenced by oil prices.
Oil Prices
Since oil prices are determined by the free market, they are always fluctuating. This means that the cost of fuel is based on supply and demand. Heating fuels are unfortunately in highest demand during the winter, which drives up the cost when you need fuel most. The colder the weather the more quickly supplies are drained by homeowners and fuel providers, which drives up the demand. In other words, as the temperature drops the price of oil rise.
While weather is a major factor in heating oil prices, the economy and politics from sources overseas also affect costs. On a smaller scale, local markets also compete with each other, and delivery areas can affect the cost of fuels as well. So to an extent, geography is also a large factor.
Propane Prices
Since propane is made partially of oil, and since it competes with oil, its costs are driven by heating oil prices. Furthermore, it can be harder to get propane during times of high demand because it is largely made and supplied year round, rather than just seasonally. Therefore, harsh winters drive up the cost of propane.
Kerosene and Diesel Prices
Since kerosene is created with oil, its costs are naturally determined by oil prices. Similarly, diesel is also affected by the price of oil and a seasonal demand also drives up prices. Like oil and propane, there are also transportation costs that must be factored into the prices of kerosene and diesel. Furthermore, diesel is in high demand in Europe, as many more people there use it to fuel their cars. Therefore, United States markets must compete with the European demand.
At Rymes, we know that you have enough to worry about in the winter. We think that tracking shifting fuel prices should not be added to your already long to-do list. We want to help you minimize the impact of fluctuating costs when you are on a tight budget. That’s why we offer residents of NH, MA, VT, and ME a way to lock in home heating oil prices. Check out our “Pay As You Go” options to see how you can secure a home heating oil price for the season or even for the year!
From locking in home heating oil prices to heating equipment and repairs, we’re the ones to call for heating services in New Hampshire, eastern Vermont, southwestern Maine, Martha’s Vineyard, and north-central towns in Massachusetts. Call or email us today as you prepare your home heating systems for the upcoming months. 603-228-2224 & customerservice@rymes.com
