The Cost of Home Heating Oil Drops Lower and May Stay Low
You’ve probably noticed it doesn’t cost as much money to fill up your gas tank these days. Across the country, people are paying less than $3 per gallon for gas for the first time since 2010. Home heating oil prices have also declined. This year it will cost you 15 percent less for home heating oil than it did last year. That’s great news for New Hampshire, where most people heat with oil.
As those of us who heat with oil know, the price can fluctuate. How long are these low oil prices going to last? Energy experts say for at least a year, if not longer. In fact, the New York Times reported recently that, “the drop in prices has been rapid, and most experts do not foresee a reversal of the trend anytime soon.”
Why are oil prices expected to stay low? Part of the answer is increased production. You’ve likely heard about the oil and gas boom in places like North Dakota and Canada. The debate over the Keystone XL Pipeline is largely a product of Canada looking for ways to get their oil to refineries more efficiently. Increased production around the world has increased supply, which means lower home heating oil and gas prices for us.
According to energy experts, places like Canada and Brazil have large enough oil fields to increase production even further. That just makes it even more likely this steady oil supply we are seeing today will continue.
Another factor is a lack of new demand. Places that had booming economies a few years ago, like China, are seeing slower growth these days. Europe’s economy has slowed recently as well. On top of that, many countries have enacted stricter environmental laws that promote energy efficiency and the use of alternative energy sources, like wind and solar. Better built homes means less heating oil used during the winter in homes across Europe, and less demand for the oil being produced today.
Experts also say that continued production in the Middle East, despite protests and armed conflicts across the region, is helping keep prices low. Analysts had predicted that in places like Iraq and Libya, fighting would hinder oil production, but instead Libya’s oil production tripled this year.
What are these analysts saying about prices now? Nearly all say these low prices will continue for at least the next year and some are saying two years or more is likely. The Energy Information Administration is the official research organization for the United States when it comes to energy prices and supply. According to the Energy Information Administration, crude oil prices are likely to remain around an average of $83 a barrel next year. That’s $18 less than the administration had predicted earlier this year.
Economists say this is great news for the U.S. economy. By spending less at the pump and on oil heat this year, people will have more money for other things.
Because these low prices are expected to remain consistent throughout the next year, this is an opportunity to lock in a good price with your home heating oil supplier. We offer a number of payment options, including pre-buy programs or monthly plans. If you have questions about home heating oil and how to take advantage of these lower prices this year, please give Halle Oil a call at (603) 627-7869.