A huge benefit to ordering heating oil is that you can buy oil based on your schedule! While some homes have multiple tanks that get a fill once or twice during the year, others only have one tank that needs to get a fill multiple times throughout the year. But with rising oil heating prices, is there a time of year that offers the best prices? In this blog post, we go over the best month to order oil!
Why do Heating Oil Prices Fluctuate so much?
To figure out when the best time to order heating oil is, it’s important to understand why prices fluctuate often. There are a total of three primary driving factors as to why heating oil prices tend to fluctuate so much:
- Supply and Demand for Crude Oil
- Competitive Oil Pricing/Supply and Demand of Local Dealers
- How you buy heating oil (either ordering heating oil online or relying on automatic delivery)
Supply and Demand for Crude Oil
The prices for crude oil have a larger effect on heating oil prices than you might think. Home heating oil is a derivative of crude oil, which means that the global supply and demand prices can directly affect prices for heating oil. Crude oil is known as the base fuel that often sees usage in gasoline, diesel, jet fuel, heating oil, and a lot of machinery lubricants.
Usually, when the global demand for crude oil declines, so does its price. This is due to oil production rates not decreasing right away, with oil producers still needing to offload their supply of crude oil. This happened in the beginning of 2020 when COVID-19 caused everything to become locked down and travel was stopped. Out of nowhere, nobody was flying on planes or even commuting anywhere for work. Due to this, there was a massive amount of produced oil that was in an overabundance. The prices for heating oil dropped drastically, bringing it to an all-time low! Some dealers even dipped their prices to less than a dollar!
The Supply and Demand of Local Heating Oil
This is another factor that tends to greatly affect the prices of heating oil. Long Island, for example, is home to hundreds of thousands of homes that use home heating oil and a large amount of heating oil dealers at their selection. The dealers in the area have to be very efficient to offer the best possible prices available and fast delivery. Due to this, heating oil prices in Long Island are cheaper than anywhere else in the Northeast United States.
In much less densely populated areas, there is normally only one or two heating oil dealers to choose from. Due to this, they can charge much more for heating oil and they don’t have to deliver immediately. This is because they control most of the heating oil in those types of areas. With less oil in supply in these areas, oil tends to be a bit more expensive.
This leads to the question of which month is the best to order heating oil. Normally you might expect prices to be lower during the summer/the off-season. But, dealers tend to make fewer deliveries during the summer because the demand isn’t as high. Due to this, dealers are less inclined to lower prices during the summer and be a bit more competitive. The below graph shows the historical price for heating oil over the past 30ish years. The takeaway here is that the supply and demand of crude oil affect oil prices and outweigh any seasonal effects or discounts that might be put in place.
Should you go with Automatic or Will-Call Delivery for Heating Oil?
While the price of oil fluctuates often on the market, there are two more important aspects to understand. The price you pay for oil is also determined by using either will-call delivery or automatic delivery. Both of these will very heavily influence the amount of money you spend on heating oil. Automatic delivery for starters, often charges you a “premium” price for heating oil.
Dealers can and will charge you at least an additional $0.50 per gallon, but it can even go as high as $1.00 extra per gallon or more! Imagine a winter where you paid an additional $1200 in heating oil over the year while your neighbor paid $1200 less on oil! That’s a perfect example of the difference between will-call heating oil and automatic delivery. If you use automatic delivery, then the best month to order won’t apply to you. This is because the dealer will deliver to you on time.
You’ll be able to take advantage of various deals on heating oil when you need it! Ordering from sites like FuelSnap will give you the ability to shop around for the best prices in your area! But, if you’re afraid of running out of heating oil, then installing a Smart Oil Gauge will be the best thing you can do! You’ll be able to monitor your tank from anywhere and know how many gallons of oil are in your oil tank, just by looking at the app!
The Verdict: Order Oil Any Time Of the Year
Is there a month where it would be more ideal to buy oil than others? That depends on the current market price of crude oil, but it doesn’t matter if you order in a particular month compared to another. The only real exception to this rule is when it’s very cold out which makes finding heating oil in a more timely manner difficult.
Even when we’re being hit with a cold snap, you’ll always be able to check your prices for heating oil near you with sites like FuelSnap. You’ll be able to check to see what dealers are not available as well as their prices! Ultimately, you’ll end up saving hundreds of dollars over a year.
Keep in mind that you should not be letting your tank get too low while you’re waiting for a good price to come up. If you run out of oil during the winter, your pipes will freeze and you’ll have a much bigger financial burden on your shoulders. If you were to run out of oil, the best month would no longer matter. The best thing to do is to order oil once you’ve hit a quarter tank, regardless of the time of year.
Happy Heating,
Hunter
