Heating Oil Prices
A Closer Look at Heating Oil Prices in Michigan
People who keep their homes warm with heating oil always wonder where fuel prices may be headed, especially when we approach our long and cold Michigan winters.
Keep in mind that heating oil, like gasoline and diesel fuel, is a refined product derived from crude oil, so its price is closely tied to the price of crude oil.
It’s always hard to predict which direction crude oil prices will go because there are many factors that cause prices to rise and fall. This includes unforeseen events like severe weather and global politics that affect energy production.
One example would be destructive hurricanes temporarily shutting down major refineries in the Gulf Coast.
Although events like this may not lead to any actual shortages, fuel prices around the country—including gasoline, diesel fuel and heating oil—can all rise based on speculation in the stock market about what could happen in the coming weeks and months. This is often referred to as the “fear factor.”
In contrast, an event like an international crisis can often have an effect on oil production, with the outbreak of the war in Ukraine being a prime example. Supply-and-demand balance has always influenced where crude oil prices go.
On a local level, seasonal demand, operational costs and even competition between dealers can result in heating oil price fluctuations.
If you would like to view a long-term history of wholesale heating-oil prices in Michigan, please go here.
Michigan Heating Oil Companies Look Out for You
During periods when prices go up, people sometimes misunderstand how negatively this situation impacts local fuel dealers. Heating oil companies don’t make more money when prices rise. It’s like when the cost of coffee, milk, or orange juice rises. It’s not your local grocery store that is profiting from these higher prices.
In the same vein, heating oil customers have a harder time paying their bills. They reduce expenditures. As a consequence, heating oil companies may need to tap into their lines of credit. Phones light up with questions from customers. In short, it’s a challenging time for everyone.
To take away any worries about the normal ebb and flow of oil prices, reach out to your Michigan heating oil dealer. They can tell you about programs designed to save you money and keep your heating bills manageable—no matter what happens with world oil prices.
Ways to Save
One thing that always pays off whether prices rise or fall is to cut your fuel consumption. There are many ways you can minimize your winter heating bills and maximize your comfort.
- Remember that efficiency beats switching fuels. The Consumer Energy Council of America says switching fuels is a “costly and long-term gamble”; you can lose thousands in conversion and installation costs. To reduce your fuel bills, the best solution is to invest in oilheat efficiency. You can also save on the cost of a new heating oil system by qualifying for equipment rebates.
- Make sure your heating oil system is operating at peak efficiency by having a professional tune-up done by a qualified service technician. It can help you save 5–10% on your annual fuel bills. Read other tips for boilers and furnaces.
- Evaluate your home’s insulation. You can save a lot by properly insulating ceilings, and by sealing, caulking and weather-stripping your windows and doors.