When you notice heating oil prices go up, it is not uncommon to believe that the oil company doing the delivery to your home is at fault and is controlling the price. The reality is that there is far more behind the scenes that leave the oil company the last one in the chain with very little control or influence on the price. So, what does affect the price of oil? More things that you might think!

The first thing to know is that crude oil prices can wildly fluctuate due to what is going on in the world. OPEC and its allies often adjust prices based on global conditions, such as the decreased prices seen during early 2020 due to less demand on oil. To get an idea about the volatility of crude oil prices, consider that they have been below $20 per barrel to well over $110 just over the past decade. Consumer demand clearly has a huge influence on prices, as does everything going on in the news.

Another factor that affects price that a local oil company cannot control is supply disruptions. Embargos, political events, wars, weather, and policy changes can all affect supply which in turn affects price. It might also surprise you to learn that when oil prices change, it doesn’t just affect what you pay for heating oil as a consumer. The economy is affected, as well, with some sectors being boosted when prices rise and others suffering.

While the many factors that go into crude oil prices are out of the control of your local oil company, they do have the ability to set their prices based on their own business structure and overhead. That is why an oil company that has been around for quite a while can often have lower prices thanks to their experience and past investments in equipment and machinery. In addition, since oil prices do have seasonal fluctuations, consider timing your oil delivery carefully so take advantage of whenever prices are down.