Heating oil prices

Because heating oil is an oil derivative, the price consumers are likely to pay are subject to fluctuations in the market price of crude oil, which can rise and fall rapidly depending on changes in both supply and demand conditions.

The extent to which heating oil prices can change was brought into sharp relief in 2008, when crude oil rose to historic highs and forced a considerable upward trend in heating oil costs. On July 11th 2008, crude oil traded at $147 per barrel, marking the pinnacle of a series of price rises which had pervaded throughout the first half year and added more than 50 per cent to its value in under six months.

The impact of this price surge has been wide-reaching and has been the subject of much discussion. In the aviation industry, the price rises have been blamed for the collapse of a number of major airlines in the UK and the rest of the world as business models failed to absorb the increases in the price of kerosene, which is used as a jet fuel.

Elsewhere, fishermen and hauliers operating in Europe held a series of strikes that brought commerce to a standstill in ports and on motorways in countries such as Spain, Italy and France. For domestic heating oil users, kerosene prices rose considerably and fluctuated heavily, even on a daily basis, something which highlighted the importance of shopping around for quotes to get the most competitive deal.

According to one customer living in north-east Essex writing on helmes.fsnet.co.uk, prices on August 22nd 2008 ranged between 56.49p to 52.75p per litre, although a day previous the lowest quote had been 50.5p.

When buying in large quantities, searching for competitive rates can have a substantial effect on the total sums paid. For those who have large capacity boilers, it is worth remembering that suppliers often offer discounts for bulk orders. This may help to further capitalise on gains made during periods when heating oil is trading at reduced rates due to falls in the price of oil..