What causes oil prices in Wisconsin to change?
As you have no doubt learned, the price you pay for heating oil in Wisconsin can change quite a bit from year to year. Recently, heating oil prices — along with all energy prices — have been surging. Why is this happening?
It’s because the market price of oil is always tied to a variety of factors that are constantly changing. As you might imagine, war, political turmoil, and natural disasters like tsunamis, earthquakes, and hurricanes can cause prices to rise significantly.
If you would like to view a long-term history of wholesale heating-oil prices in Wisconsin, please go here.
To see the U.S. Department of Energy’s outlook for crude-oil prices, please go here.
Global conflict and the crude oil market
The price of crude oil is the most important factor in the pricing of heating oil. Like gasoline, diesel, and jet fuel, heating oil is one of the many products refined from crude oil. Crude oil is a globally traded commodity which means that it is subject to many forces that drive its value up or down.
Even before Russia invaded Ukraine in February 2022, energy prices were increasing in anticipation of sanctions on the Russian energy sector. Russia is the world’s third-largest petroleum and liquid fuels producer. Even the possibility of disruption in the energy supply heavily influenced buying and selling of commodities traders.
Russia invaded, and the U.S. and other countries placed bans on Russian imported oil and petroleum products. It left a big energy void to fill. Events like this cause energy prices to 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.
Pandemic-related supply issues
Before the uncertainty created by the Ukraine war, oil prices fluctuated because of COVID-19. In spring 2020, oil prices plummeted when economies locked down across the globe. Production virtually ground to a halt. As these economies reopened, producers were slow to catch up with increased demand, and prices rose.
There have been other pandemic-related issues, such as:
- Rising fuel delivery costs
- Pandemic-related workforce expenses
- Supply chain delays
Winter weather and seasonal demand:
U.S. heating-oil prices are typically driven by the use of oil in homes in the Northeast, which consume about 90% of the heating oil used domestically. In a brutally cold or volatile winter, prices often rise. Also, on a local level, operational costs (including overtime) and even competition between dealers can result in price variation.
How your heating-oil company can help
Your full-service heating-oil company has perfected many ways to help you cut your heating costs dramatically while increasing your home comfort. Consider your Wisconsin heating-oil company your energy-saving partner, one that takes pride in delivering service with a personal touch.
During our long heating season in Wisconsin, your heating-oil company will always maintain and ensure an ample supply of fuel to make sure you stay warm and safe.
Your local heating-oil company may be able to make life easier with automatic deliveries of fuel so that you don’t have to worry about calling for deliveries or running out of fuel when you need it the most.
If your heating-oil company offers a monthly budget plan, it’s an excellent idea to take advantage of it. These plans let you spread your heating-oil expenses over the course of the year in equal monthly installments. This makes planning your fuel payments much easier and can cut your winter expenses by half.
To take away any worries about the normal ebb and flow of oil prices, contact your heating-oil company. Many companies offer programs designed to save you money and keep your heating bills manageable—no matter what happens with world oil prices or heating-oil prices in Wisconsin.