There are many people who heat their homes with heating oil. There are approximately 8.5 million households in the U.S. alone who rely on heating oil for their fuel. Approximately one third of these households are located in the Northeastern part of the United States. With many of these people concerned about the increasing heating oil prices, they might want to know where their heating oil comes from as well as how the price for it is established.
Heating oil comes from the raw crude oil. The oil that we typically use for heating is actually refined out of the crude oil. Jet fuel, gasoline and two other products are also made from the refining of crude oil. In fact, diesel fuel is another product that is made from this raw crude oil as well.
Since the oil we use for heating comes from the raw crude oil, whatever happens regarding the pricing of crude oil will also be reflecting in the heating oil we use. There will sometimes be occasions when we might see the price of heating oil go up or down at a different rate than the crude oil, however, they will usually trend in a similar direction.
One simple way many households can lower their heating oil costs is to purchase it off peak. The summer months are a good time for topping off your supply of heating oil. Prices are usually low in the summer because demand is also low. As you move into the cooler months when the heating season kicks in, typically from the months of October to March, you will notice the price begin to rise. If the winter is colder than normal and there are is an insufficient supply of heating oil, the heating oil prices may shoot upwards. This is why you should also follow the weather forecasts to anticipate when a cold snap is coming and you can top off ahead of time.