Let’s Look Forward to Low Heating Oil Prices and Big Savings
As we entered October, anxiety over heating oil prices arose, but good signs still point toward price stability and big savings.
It all started when crude oil prices went above a benchmark level of $50 per barrel—the first time this has happened since July.
Analysts attributed this temporary price bump to three main factors: a small decline in monthly U.S. oil production, a slight weakening of the U.S dollar and Russia’s intervention in Syria.
Meanwhile, back in New Jersey, we saw the wholesale price of heating oil tick up by a few cents per gallon, right around the time we experienced an early frost and a lot of people became more motivated to get their tanks filled.
So what do we think about all of this? We have taken this all with the proverbial grain of salt. We’ve been at this business since 1929 and we know from years of experience that there is no need to panic over the normal daily ups and downs in the energy markets.
Because the fact is, prices for commodities like crude oil and heating oil will always have their ebbs and flows over the short-term. We prefer to look at all the positive signs for the future of oil prices.
- Heating oil prices remain at their lowest level since 2009.
- U.S. oil production has reached its highest point in 43 years, leading many analysts to predict that oil prices will stay lower for the foreseeable future.
- Crude oil prices have once again dipped under the $50 per barrel mark and since the summer of 2014 have taken a big drop–about 50%.
- The average wholesale heating oil price stood at about $1 less per gallon than at this time a year ago, according to the U.S. Energy Dept.
- U.S. household expenditures for heating oil this winter are projected to be 25% lower than last winter. That’s due to lower fuel prices and lower heating demand.*
- The National Oceanic and Atmospheric Administration forecasts overall heating degree days this winter will be 7% lower than last winter and below the 10-year average.
*Source: Short-Term Energy and Winter Fuels Outlook, U.S. Energy Information Administration, 10-6-15