Heating Oil Prices at 4 Year Low!

Good news for heating oil users has continued throughout November 2014 as heating oil prices declined by almost 10% from the beginning of the month. In some areas of the UK 900 litres is now below £400 – a significant decrease, especially when the price has fallen from over £500 at the same time last year. There are a number of factors which have resulted in falling prices and we examine the key ones below.

OPEC

There has been a global oversupply of oil for many months. On the 27/11/2014, The Organization of Petroleum Exporting Countries (OPEC) decided not to cut oil production, which would have helped to support oil prices. Due to this oversupply at global level, oil prices have been driven down. Although, OPEC members have the lowest average production costs which, in some cases are as low as £1.30 per barrel – they have increasingly lost ground in the USA, which is the world’s largest consumer of oil.

USA

Production of oil via fracking in the US has resulted in the US becoming a net exporter of oil rather than a net importer. With over a million Fracking oil wells in the country, this has led to part of the over supply problem. Simple economic principles state that when there is over supply, prices fall. As the US now have reduced demand to import oil this has also stabilised prices as ongoing conflicts in the Middle East now have less relevance to heating oil prices.

Heating Oil Prices 2015?

As always, there is no guarantee that oil prices will continue to fall. In the short to medium term, they may well do, but longer term, we would anticipate oil prices rising again. The good news for now is, though, if you are looking for a fill of heating oil before Christmas, you will have a lot more change left in your pocket than this time last year.

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Take Action: Prepare for Winter Now by Ordering Heating Oil Early

News for heating oil users: The UK could be set for one of the coldest winters on record.

Although we see reports like this quite often, there seems to be quite a bit of backing for reports that this Winter could be a cold one, with the MET Office also suggesting that it could be a cold winter.

The Telegraph are reporting that: “Britain braced for long, snowy winter as strongest El Nino since 1950 expected. The strongest El Nino for 65 years could bring a winter like the 2009/2010 Big Freeze”

With this in mind, we are advising customers to check their oil tank levels now and order well in advance of running out. To be safe you should place an order when around 6 inches of heating oil are left in your tank. This will give you a couple of weeks supply in case delivery is extended.

If bad snow does arrive, it slows down deliveries (and makes some deliveries impossible), so if you are in a house with difficult access, it’s extra important to be prepared.

The good news for customers is that heating oil prices are down by 36% since last year, so now is a great time to top the tank up! Visit our homepage to get a low cost heating oil quote now.

We will follow this post up with some tips on how to save money on your oil bills and how you can prepare for a cold winter.

Domestic Heating Oil Price Patterns in the Coming Months

Predicting upcoming patterns in domestic heating oil prices is a notoriously challenging task. This difficulty is currently being compounded by various global geopolitical factors and a general oil market which is, to say the least, unstable.

There is currently little consensus among market analysts, who point out that recent increases in oil prices have tended to be temporary. Some commentators remain convinced that many of the factors which caused the depression in oil prices have been or are in the process of being corrected. For example, oil-producing countries such as the United States are beginning to address the problem of overproduction. They also point to economic indicators elsewhere and to the prediction of agencies such as the American Energy Information Administration that oil is set for a dramatic upturn in both industrial and domestic demand. This combination of factors, they say, heralds a certain increase in oil prices and consequently domestic heating oil prices.

Other analysts take a more sanguine position. They cautiously admit that oil prices are on a broadly upward trajectory but say that they remain hugely vulnerable to external factors. The recent tropical hurricane, for example, had a greater impact than usual on prices. Likewise, recent research shows that the process of reversing overproduction is, at best, happening on slow and uneven basis. There remains a significant supply surplus of oil in key oil-producing countries. For example, the latest statistics suggest that over two million surplus barrels are being produced every day. There is also some doubt about the credibility of the predictions of an upturn in industrial and domestic demand. Contagion from a weakening Chinese economy, say some, could see industrial demand decline, while the factors informing domestic demand, such as sustained inclement weather, are hardly reliable.

To the extent that there is an area of agreement on oil price patterns in the coming months, it is that the market has probably reached its lowest point and that prices will rise. There is no real certainty, however, about how fast or how steeply prices will rise, or whether it will be a sustained rise or subject to peaks and troughs.

This uncertainty, of course, affects domestic heating oil and can make it difficult for the consumer to plan budgets and requirements. Staying informed and keeping up to date is the best way to arm oneself against price fluctuations.

You can contact us if you need more information or if you want to take advantage of the current low prices for domestic heating oil.

A New User’s Guide to Heating Oil

When considering methods of heating homes, there is perhaps the temptation to think only in terms of electricity and gas, especially outside of more remote rural areas. There are, however, many clear advantages to be gained from using heating oil, which can be a cost-effective and highly efficient way of heating your home.

What Is Heating Oil?

It is a product obtained from crude oil by a technical procedure known as fractional distillation. Put simply, this involves heating and separating oils at different temperatures to produce a variety of by-products, including the oil used to heat homes.

Oil is stored in a tank which is connected to a boiler. The oil is pumped through a pipeline into the boiler, where it combusts and, in turn, heats a separate water supply. Through connected pipes and radiators, this water efficiently and inexpensively heats your property.

It differs from gas and electricity in that it is not supplied via a dedicated network directly to your home. When you need to buy some, you would contact a reputable supplier, such as Value Oils, who will dispatch your order by road.

What Are the Advantages of Heating Oil?

One of the key benefits is that its price varies during the course of the year. For example, during the warmer summer months when there is less demand, prices tend to fall. Customers can capitalise on this by purchasing reserves of oil to be used in the more expensive winter months. Clearly, this can translate into significant cost savings as well as allowing realistic long-term household budget planning. Homeowners can also ensure that they equipped with adequate supplies to keep their home and family warm during unexpected inclement weather.

As well as seasonal factors, the price is sensitive to international oil market fluctuations, meaning that the well-informed consumer can take advantage of periods where prices are depressed – as they were, for example, over parts of the last year.

Heating oil suppliers will be delighted to explain this heating system in more depth and will help you decide whether this is the most appropriate solution for you and your family. On an ongoing basis, they are also the repositories of helpful hints for safety, maintenance, budgeting and planning. Learn more about choosing and using heating oils from Value Oils – one of the UK’s foremost suppliers.

Keep Warm and Well Despite Fluctuating Domestic Oil Prices

The international oil markets remain volatile, and analysts predict that the uncertainty will persist for many months to come. The underlying reasons for the market fluctuations have been examined at length by the media and business commentators, and the central issue remains weak demand coupled with over-production in many oil-exporting countries. The volatility naturally affects large corporations and their business operations, but it also filters down to consumers, who can find unpredictable domestic oil prices make it rather difficult to plan and budget for their requirements. As well as checking various sources for updates on prices and tips for controlling heating expenses, those concerned about coping with the coming winter months can consult the recently published government guide entitled “Keep Warm Keep Well”.

The publication is intended to provide guidance for the elderly and those who may struggle with heating costs during the cold weather. It takes the form of a series of detailed suggestions, including:

1. Check long-range forecasts so you can stay a step ahead of the weather and ensure you have sufficient provisions and fuel to carry you safely through for the most inclement days.

2. Try to enjoy a healthy and varied diet, including warming soups, stews and porridge, and stock up on cans, bottles and frozen food so that you are not compelled to leave home on icy or snowy days.

3. Stay active and take as much exercise as is safe and comfortable, even if this means just walking around the house every so often.

4. Dress appropriately, with plenty of layers and knitwear.

5. Make sure your home is properly insulated to retain heat. It is also imperative that you regularly have your heating equipment professionally checked for safety and efficiency.

6. Investigate whether you are eligible for help with heating costs. Senior citizens, for example, are entitled to an annual payment of £200 towards their winter fuel requirements, and those on low incomes may be able to claim cold weather payments. On receipt of these sums, it may be helpful to stock up on fuel in order to be sure of having an adequate supply and to avoid future price rises.

The guide is available online and contains a wealth of information and advice which, accompanied by updates and guidance from Value Oils, can ensure you and your family have a warm and safe winter irrespective of domestic oil prices.

Planning Heating Oil Requirements for the Winter

Mark Twain famously said that “climate is what we expect, weather is what we get”. To no country on earth could this apply more accurately than the United Kingdom, where we experience wildly variable weather conditions but where, paradoxically, we have a touching faith in the powers of forecasters when they tell us what to expect. Given how useful being armed with intelligence about the weather conditions in weeks and months to come would be in terms of planning and budgeting for our fuel requirements, it is fair to ask: are long-range forecasts reliable?

Worst Winter in Decades?

It is customary in the autumn for newspapers to carry lurid headlines prophesying some variation on “the worst winter for 50 years”. Their source is usually a niche weather service which uses entirely different prediction yardsticks from the rest of the industry. Some time ago, the BBC website published a feature on this peculiarly British phenomenon. It concluded that the island location and other geographic idiosyncrasies of the UK meant that these predictions were impossible to make with any degree of certainty. In discussing its findings with the newspaper editors, they admitted with refreshing honesty that they published these exaggerated reports because they dramatically increase sales.

The Meteorological Office, whose experience in recording and analysing weather conditions is unrivalled anywhere on the planet, came to the same conclusion. While, the Met Office said, it was investing heavily in technologies to enhance its prediction capabilities, forecasts for more than a few days ahead were essentially impossible.

On the basis that long-range forecasts are so unreliable, is it possible to plan your heating oil needs?

Firstly, it is always worth checking the short-term weather reports, because they can accurately tell you what to expect during the coming days. If a cold snap is being predicted, always check to make sure you have adequate supplies of fuel to keep you and your family warm.

Secondly, domestic heating oil prices reflect demand, which naturally increases during the cold months. It is often worth building up a supply during the low-demand months. If you have missed this opportunity, it is still worth the certainty and peace of mind to buy a large quantity as soon as you are able. Value Oils is committed to offering you the best possible price, and we constantly update our website to keep you informed.

Fall in Domestic Oil Prices Is Good News for Householders

The fluctuations of the international oil market are never far from the news, and their contribution to low domestic oil prices is well understood. In recent months, however, they have been affected by low demand for heating fuel, as much of the northern hemisphere has experienced unusually mild weather.

The Weather and Heating Oil

The unpredictability of the weather in the United Kingdom is, of course, a national talking point. During the past few months, though, our counterparts in Europe and North America have been subject to wildly atypical conditions. There was much coverage, for example, of short-sleeved New Yorkers on Christmas Day, and numerous American states have recorded unprecedentedly high winter temperatures. Likewise, storms and flooding aren’t limited to our own shores: Mississippi, for instance, has just experienced a devastating hurricane. The reasons underpinning the dramatic weather are complex, with the El Nino phenomenon and unusual developments in the North Pole being cited as the most likely culprits. A collateral effect of the wet, mild conditions is that there is reduced demand for heating fuel, bringing domestic oil prices to near record lows. The American media went so far as to attribute a recent consumer spending spike to families having more disposable income owing to the low oil and domestic fuel prices.

How Do I Capitalise on Low Prices?

It is fair to say that analysts are not expecting prices to rise significantly during the next few months but, perhaps counter-intuitively, they recommend that consumers stock up now. The first reason is that with fuel purchased at current prices, you can plan your household finances with real accuracy: there will be no surprises to disrupt your budget. You will also have peace of mind that your family and home are equipped to deal with cold snaps, one of which is forecast for January. The second reason is that buying a large stock now can save on the delivery costs associated with smaller, more frequent orders. The final reason is that, while no immediate price rises are anticipated, the volatility of the oil markets means that there are no guarantees, and stocking up now would give you a degree of certainty.

At Value Oils, we constantly monitor the markets. Check our pages regularly for news and details of our pricing structure

Heating Oil Prices Fall to Eight-Year Low in Ulster

It was widely reported in the press before Christmas that heating oil prices had fallen to an eight-year low in Ulster, despite an upsurge in demand following the recent cold spell, which saw snow, ice and sub-zero temperatures throughout the province and elsewhere in the United Kingdom. The Belfast Telegraph reports that the average price of 900 litres of the fuel has been halved to roughly £250. Accompanied as it has been by a sharp fall in the price of petrol to under £1 per litre, this is welcome news for household finances. But what are the reasons for prices falling, and what are the views of market observers on how consumers should react?

Why Are Oil Prices Falling?

The volatility of the international oil market has been the subject of much analysis during the past year. There are several complex geopolitical factors at play, but the key issue is that production remains significantly higher than demand, pushing prices ever lower. Certain oil-producing countries have responded by attempting temporarily to curtail production, but the Organization of Petroleum Exporting Countries (OPEC) has been rigid in its determination to sustain high production levels in order to retain its market share. There are rumours of rifts emerging within OPEC about the sustainability of this approach, and some member countries are beginning to experience serious economic repercussions. Saudi Arabia, for example, is recording an alarming deficit. Despite this, there appears to be no immediate prospect of OPEC changing its course or of increased global demand for oil. Commentators believe that prices will either stabilise at current low prices or fall even further.

How Should Heating Oil Users React?

While prices are expected to remain low, there is, of course, no guarantee that this will happen: the landscape can change dramatically in a short period of time. This, and the fact that buying in bulk once or twice a year rather than in small quantities every month can help to contain delivery costs, seems to be the reason why experts are urging consumers to stock up now while prices are at record lows. January is forecast to be especially inclement, and stocking up can give you peace of mind.

At Value Oils, we watch oil prices closely and pass savings on to our customers. Check this site regularly for the latest news and for details of our competitive heating oil prices.

How Low Can Domestic Oil Prices Go?

Domestic oil prices are being priced lower than ever, however this wasn’t always the case. It was not so very long ago that analysts were sceptical the price of crude oil would fall below $30 a barrel. After all, in January 2014, crude oil was selling for more than $100 a barrel, which was hitting UK consumers pretty hard. Today the situation is very different. The price of oil has plummeted in the last twelve months and it’s now has reached $30 a barrel.

Expert Opinions

Expert economists at the Royal Bank of Scotland are predicting crude oil could fall to around $16 in the not too distant future whereas another large bank, the Standard Chartered, is predicting oil will drop below $10 a barrel. Is this economically viable?

Politics and Oil

Domestic oil prices could be significantly lower because of politics. Saudi Arabia is the biggest oil producer in the world. In the past, when there has been a glut of oil, Saudi Arabia has reduced its oil output to artificially prop up the market and ensure prices stayed relatively high. This time, it has refused to do so.

Its neighbour, Iran, is keen to increase production from its own oil fields following the lifting of US sanctions of Iranian oil imports, and if Saudi Arabia slows down production, Iran would be in an excellent position to grab back a chunk of the market. However, tensions between the two countries are hovering around the ‘glacial’ level, so Saudi Arabia is not keen to give an inch.

There is also the US factor: shale fracking has allowed the United States to massively increase oil production and it’s now a major producer, which doesn’t please the other big oil producers much; hence another good reason for the Saudis to drive any and all competition out of the marketplace.

How Long Will Oil Production Stay Economically Viable?

If the price of crude oil continues to freefall, many of the smaller producers won’t be able to sustain production. The low prices are already beginning to hurt North Sea oil production, as was evidenced by the BP announcement that 600 jobs would be going.

But what is clearly very bad news for the oil industry is very good news for consumers. Domestic oil prices for heating are now lower than they have been for a long time, so stock up now and you can make great savings!

Heating Oil vs Gas – What’s the Difference?

If you are ready to replace your heating boiler, it will probably come down to oil vs. gas. So what’s the difference?

The Cheaper Option

Heating oil may not be the cheaper option as gas has traditionally been the most popular heating fuel for UK consumers, mostly because it has always been low-cost, but there has been a massive shift in prices in recent months and with oil prices so low right now, natural gas is no longer the cheaper option.

In the last few years, home heating oil has been around 12% more expensive than natural gas. At the end of 2014, the balance tipped in oil’s favour and anyone with an oil central heating system was laughing all the way to the bank. Natural gas prices have fallen slightly in the last twelve months, but nowhere near as low as oil, so an oil central heating system is still by far the better option right now.

Location Matters

Depending on where you live, you might not have a choice as to the type of heating boiler you install. Not everyone has access to the mains gas network, so if you are one of millions of consumers who don’t, oil boilers are the smarter choice. In the past, consumers might have considered installing an LPG system, or even an eco-friendly ground pump heat exchanger, but if you go with either of these options, they will be a lot more expensive in the long run.

Energy Efficiency

New guidelines in place for the installation of heating oil and gas boilers state that all new and replacement boilers have to have an energy efficiency rating of A or B. They must also be condensing boilers. An older oil boiler is likely to be less efficient than an older gas boiler, so it is worth replacing it with a newer condensing model.

There may very little to choose from between new oil and gas boilers in terms of energy efficiency, but with any boiler, it is essential that you have it serviced every year, so problems can be fixed and the boiler remains as energy efficient as it possibly can be.

Before replacing a central heating boiler, always make sure your final choice is the right one for your current situation. For more information please visit the Value Oils website.