Home Heating Oil Pricing and Tips for the Winter

By Aleta Rogers Heating Oil Program Manager @ The Energy Co-op

That winter chill is in the air again. Maybe you haven’t thought about it all summer but now you’re remembering those high heating bills from last winter. Whether you like it or not, it’s time to start making decisions about how you will keep your home warm this winter. This past winter was about 11% colder than average, this year the EIA predicts normal, average temperatures. But as we learned last year, Mother Nature does what she wants. Is it too soon to utter the word “polar vortex” again? Heating oil users were hit hard during the polar vortex due to a spike in price spurred by high demand and depleted inventories.

Well, this year there is finally some good news for heating oil users. The Energy Information Administration (EIA) released its Short Term Energy and Winter Fuels Outlook report and projects that households using heating oil will spend an average of 15% less than last winter, which equals about $362 in decreased heating costs. This is due to a predicted warmer winter, accounting for 10% less consumption, and a 5% decrease in prices. Let’s cross our fingers that the EIA’s prediction is right.

Although the EIA is predicting a milder winter, the farmer’s almanac (that boasts an 80% rate of accurate forecasts since 1792) is saying to expect a colder and snowier winter than normal in Philadelphia. Even if the weather does get cold, things are still looking up for heating oil users mainly because of the low price of crude oil right now. In fact, it is at its lowest price since 2012! The reason for this is mainly due to increased domestic production of oil. So if you haven’t already, get your tank filled while prices are low! Total heating costs for heating oil users this season are estimated to be around $1,992 on average. See the chart below for how this compares with other fuels:

Energy Co-Op stats

Since heating oil is an “off-grid” fuel unlike natural gas and electricity, it is more susceptible to market swings due to the weather and other factors. There are a number of other factors that affect the price of heating oil besides weather including inventories, crude oil price volatility, and changes in fuel specifications. Right now inventories are slightly below what they were last year around this time but should be more than adequate to meet demand barring any extreme instances of severe weather.

Last winter showed us that weather can be completely unpredictable but experts still like to make their best guess! The EIA says that even if the weather is 10% colder than they are predicting, expenditures will still be lower than last winter by about $124 (or $.16 less per gallon), mainly attributed to lower prices in crude oil.

In order to get an even better price on oil consider joining a buying group, like The Energy Co-op. The last two winters we helped our members save an average of $.21 per gallon compared to the average retail rate for heating oil in PA. Here are some other handy tips to reduce your heating costs this winter:

* Get your heating system checked by a professional at least once a year and change the filters regularly. Many suppliers offer an annual tune up as part of their service plan. Getting an annual tune up will keep your system running more efficiently ensuring you get the most out of every gallon of heating oil burned. Just like getting the oil changed in your car, keeping your system running smoothly and at maximum performance will save you money in the end!

* Consider replacing your heating system if it is more than 20 years old. Doing this could cut your heating costs by up to 25 percent.

* Replace old thermostats with programmable thermostats, it will pay for itself in a year. This keeps you from having to worry about lowering the temperature every time you leave the house. A good rule of thumb is to keep it at 65 degrees during the day and 55 degrees when you are asleep or away from home.

* If you don’t have a programmable thermostat, manually turn down the temperature at night time or when the house is unoccupied. Even slightly lowering the thermostat during the day while you are at work can help you save money!

* On sunny days, keep the curtains and blinds open on south facing windows to let the sunlight warm your home. On cloudy days or in the evening, close them to keep the heat in and reduce drafts.

* Keep your home properly insulated! It’s a good idea to insulate your water heater and to seal cracks around windows and doors. You can even make your own draft dodger as an easy way to prevent air leaks.

* Make sure nothing (especially furniture) is blocking your vents or radiator as this will keep heat from properly circulating.

* Lastly, if you’d like to spread out your payments over the year so you aren’t hit hard during the heating season, consider signing up for a budget plan.

Have other successful efficiency tips? Email them to heatingoil@TheEnergy.Coop and we will share them with our members.

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