Low-Cost Heating Oil
A closer look at heating oil prices in Michigan
People who heat their homes with oil always wonder where heating fuel prices may be headed, especially when we approach our long and cold Michigan winters. It’s always hard to predict which direction prices will go because there are many factors that cause energy prices to rise and fall. This includes unforeseen events like severe weather and global politics that affect energy production. Examples include destructive hurricanes temporarily shutting down major refineries or an international crisis that may have an effect on oil production. Although events like these may not actually 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.”
On a local level, seasonal demand, operational costs and even competition between dealers can result in price fluctuation.
Looking on the bright side
The good news is that the fundamentals of the market remain on solid ground. A driving force for the stable, manageable prices we have seen in the past few years has been the massive increases in U.S. production. The U.S. is producing so much oil that we are moving toward being a net exporter of oil, rather than a net importer. This could become a reality within the next 10 years, according to the U.S. Department of Energy. Other factors that have kept oil prices under control have been a strong dollar and lower global demand.
To take away any worries about the normal ebb and flow of oil prices, contact 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 no matter 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.
- Make sure your boiler or furnace is operating at peak efficiency by having a professional tune-up. It can help you save 5–10% on your annual fuel bills.
- 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.
Heating oil, like gasoline and diesel fuel, is a “finished” product derived from crude oil, so its price is closely tied to the price of crude oil. U.S. production of crude oil has been soaring in recent years, and that has contributed to much lower prices.