Heating oil is refined oil made from petroleum and used in furnace and boilers to heat buildings. Research shows that more than 6.9 million homes depend on oil heat in the United States. People whose homes rely on heating oil in the winter are justifiably concerned about its cost. Since heating oil is a product of crude oil, its production, distribution and consumption are determined by the price of crude oil. Here are other four primary factors that influence Heating Oil Prices in Groton CT.
Seasonality in the Demand for Heating Oil
Demand seasonality has the greatest impact on oil price changes. Demand for heating oil is usually high at the beginning of the season, which is late September to mid-November. Oil prices often reduce gradually during March and February and remain high during winter. In most cases during spring, prices tend to go down even more. The difference in prices of oil heat in October and May vary by 20 percent or more.
Competition among Local Suppliers
Areas with many heating oil consumers also have a large number of suppliers. To compete against each other, they wage price ways. Prices set by suppliers are also determined by the amount of heating oil each supplier has in stock, changes in demand and price paid the supplier for every load of heating oil from refiners.
Regional Operation Costs
Prices also influenced by the cost of transporting heating oil to remote locations. Suppliers in various places have to comply with county and state regulations. Local taxation rates may vary as well as other operational expenses. All this builds up in the final price.
Short-term Weather Conditions
Since there are no 100 percent accurate weather forecasts, it is hard to make reliable heating oil order plans. For this reason, the demand for heating is also affected by short-term weather conditions. For instance, if a wave of frostbites lasts for weeks, the local demand and price for heating oil will increase significantly. The opposite will happen when the weather conditions improve.
These are just some of the top factors that affect Heating Oil Prices in Groton CT. Please click here for more info about heating oil and how to contact a reputable supplier.
