What Factors Determine the Cost of Heating Oil

Important Information for Our Customers

heating oil price Sullivan, ny We are part of a global economy, and as such, that means events on other side of the world can have an effect on things in the Hudson Valley. One such thing is what things cost—from the gas in your car to the milk in your fridge to the cost of heating oil.

When the price of oil rises, it hurts us all—including those of us who are in the business of selling it, because profit margins decrease. Let’s take a look at how certain geopolitical events have affected the cost you pay for heating oil.

Geopolitical Conflicts

Global crude oil prices rose to over $100 per barrel for the first time in eight years after Russia invaded Ukraine in February of 2022. As you probably know all too well by now, the price of crude oil is linked to the price you pay for gasoline, heating oil, and many other products.

Even before the war in Ukraine accelerated price increases to an even greater degree, consumer spending—combined with persistent supply shortages—had already sent inflation rates in our country to their highest level in 40 years.

That’s another factor that plays a role in the cost of heating oil—supply and demand. When the supply is low and/or the demand is high, prices climb.

After Russia invaded Ukraine, the US, along with other countries, placed bans on oil imported from Russia. That meant a decrease in supply. Energy prices rose as a result.

Why Is the Oil Supply Still Low?

You’ll hear some pundits and politicians in the U.S. assert that, “we just have to drill for more oil at home.” That’s an overly-simplified and misinformed solution to the production shortfall.

Investors know that a zero-carbon emissions world is not too far off in our future. Big money is holding back on fossil fuel investments as legislators try to move the country toward more renewable energy. Investors are looking to put their money into long-term, profitable opportunities in the burgeoning green energy field.

Local heating oil dealers like us are making excellent progress with making our fuel more dependent on renewable energy too.

Seasonal Demand

Demand tends to be higher during the colder months. That’s because U.S. heating oil prices are driven by the use of oil for heating homes in the Northeast. Our region is responsible for roughly 90% of the heating oil used domestically. The colder the winter, the higher prices tend to rise as demand for heating oil also rises.

Location

Your location affects the operating costs for a heating oil supplier. Locations that demand higher operating costs will see higher heating oil costs. Your location also determines how much competition for your business there is. Folks with many options for heating oil providers benefit from lower costs as the heating oil companies compete for their business.

What Now?

We don’t know where things will go from here. But whatever happens in the world, know that our mission at Bottini Fuel won’t change. We will continue to provide affordable heating oil and propane deliveries as well as quality service and repairs.

Bottini Fuel has over 70 years of experience keeping our customers comfortable and safe in their homes.

Contact us today to learn more about our dependable products, delivery, and service. With locations serving New York’s Hudson Valley and beyond, we’re here for you.