The global factors influencing domestic heating oil prices

Domestic heating oil prices rise and fall throughout the year, and for the average household these changes can seem to have little rhyme or reason. But the price that you pay to have your heating oil delivered to your home is influenced by a whole range of global, national and local factors.

Here is a quick introduction to all of the things that could be causing your bills to go up and down.

International factors that affect domestic heating oil prices

The biggest influence on how much you pay is the price of crude oil around the world. This price is set by how much extraction companies are willing to sell oil to buyers for, as well as the general outlook of the market and attitude of investors. The oil market goes through occasional periods of volatility, which can see prices change a lot overnight.

The global oil market also goes through periods of oversupply and undersupply, which has a significant effect on prices. As with any product, if there is a lot of oil available at any one time the price is likely to drop.

Seasonal demand

The heating oil market itself is highly seasonal, and this creates peaks and troughs of demand.

It won’t come as a surprise that UK domestic heating oil prices tend to be higher in the winter as more people need to heat their homes. This is not set in stone though, as the predictably unpredictable British weather has a habit of throwing a spanner in the works. Unseasonably mild winters and wintery springs can all have big effects on heating oil demand and prices.

With all of this in mind, you may be able to buy your heating oil at a time where prices are lower and save yourself some money.