Understanding the Latest Energy Price Surge
If you’ve depended on heating oil to heat your home for a while, you know only too well that the price you pay for heating oil in Wisconsin can change from year to year. Why does that happen?
First, it’s notable that on the whole, the price of oil has been fairly stable over most of the last seven years. But there have been a lot of changes since last year that have upended the markets, with the leading disrupter being the COVID-19 pandemic.
Second, the market price of heating oil is always tied to a variety of factors that are constantly changing.
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.
Factors That Affect Heating Oil Prices in Wisconsin
To give you some sense of how complicated the heating-oil-pricing equation can be, here’s a quick look at some of the major factors that contribute to it.
The Price of Crude Oil
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. The problem here is that crude oil is a globally traded commodity, which means that it is subject to many forces that drive its value up or down.
These forces can include:
- destructive hurricanes or winter storms that temporarily shut down major refineries
- international crises that can affect crude-oil production
- supply and demand
COVID-19 Has Played a Large Role
Last year, demand for oil sunk to deep depths as more countries went into lockdown after COVID-19 was declared a pandemic. Global supply became diminished as producers responded by scaling back oil input. Now, with the wide availability of vaccines in most countries, people are traveling again and businesses have opened up.
But global supply hasn’t caught up with all of this increased demand. When you match low supply with high demand, prices go up. Of course, this is true for many other commodities, not just for heating fuel. We’re seeing this right now across the board with increased costs for consumer goods because of the many tangles in the global supply chain, which again, can be traced back to the pandemic.
But there is a silver lining in all of this. In its Short-Term Energy Outlook, the U.S. Energy Information Administration (EIA) expects crude oil prices to remain in the $80-per-barrel range until the end of the year. The good news is that in 2022, the EIA believes lagging supply will finally overtake demand. This should lead to a drop in global crude oil prices, with lower heating oil prices expected to follow.
How Your Wisconsin 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 full-service 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.
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.
Rest assured, your Wisconsin heating oil supplier will do everything possible to ensure they can make deliveries—no matter the cost or difficulty they face.
Let’s all get through this winter warm and safe and hope for better days—and lower prices—next spring.