For the latest news on Heating Oil Pricing - check out this blog.
September 2024 - our latest update on heating oil prices
With the weather turning much more autumnal in the coming days and a drop in temperatures forecast, many of us will be reaching to turn on the central heating to keep ourselves nice and snug. There have certainly been plenty of challenges for the oil market over the last few years, and you may be wondering what’s going on in the world of heating oil prices and whether to top up now before the weather changes.
We’ve already touched on the volatility of heating oil prices and the factors that cause prices to fluctuate throughout the year. As well as the many external factors, there’s supply and demand which means that summertime is generally a good time to buy heating oil when demand is lower and prices tend to drop, in contrast to the winter months where increased demand often leads to higher prices.
So what’s happening now with heating oil prices?
This summer has seen a welcomed respite in high heating oil prices since the spike in price back in February 2022 where wholesale prices reached record highs due to the Russian full-scale invasion of Ukraine, average UK oil prices have gradually fallen back and are now at a new 24-month low - welcome news for the 1.5 households in the UK that rely on the fuel. So, now really is a good time to fill your tank.
What does the future hold for oil prices?
As we’ve said before, no one truly knows. However, there is concern that the market could continue to react to the escalating tensions in the Middle East.
Conflict between Israel and Hezbollah continues. The latest Israeli air strike is said to have killed at least 274 people with more than 1,000 wounded. There is concern that the continued conflict could potentially curtail regional oil supply moving forward, which in turn could add upward pressure to the oil market and prices. BDSwiss Market strategist, Mazen Salhab, said last week that ‘heightened concerns over a broader conflict disrupting regional oil supplies could add upward pressure to the market’.
In addition, members of OPEC, the Organisation of the Petroleum Exporting Countries and its allies, have extended broad production cuts in an attempt to boost prices this summer.
This, however, is countered by an economic slowdown in major markets such as China and the United States.
Our advice – market conditions can change at the drop of a hat. Avoid the possibility of rising prices as we move towards winter and make the most of the current 2-year low. Topping your domestic heating oil tank up early also avoids the stress of running low or even being caught out and running dry when the really cold weather hits. You can get a quote and place your order online, or call us on 01423 770 666.
What else should I consider? Our 3 top tips
- Buying small quantities often costs more whilst it is more cost-effective to order larger volumes of fuel. Whilst the quantity you can order depends on the size of your tank and how much fuel you have left in it, it costs your supplier as much to deliver just 500 litres, the minimum delivery, as it does to deliver larger quantities, and delivery costs are absorbed in the pence per litre you pay.
- Buying at the last minute can result in expensive emergency deliveries as many suppliers charge more for a priority delivery – you’re paying for the convenience. So get into the habit of checking your fuel levels on a regular basis to avoid emergency deliveries with shorter lead times, and don’t let your heating oil tank level get too low. Also, keep an eye on the weather forecast and be aware of any cold snaps that may be on the way. When temperatures drop suddenly there’s often a rush to order heating oil. This can push up prices and also mean longer lead times. We’d always recommend you top up when your tank is no less than a quarter full.
- Keep an eye on market trends. Check prices regularly so you can fill your tank when prices are lower, subject to having capacity in your tank, and to avoid sudden price spikes which could strain your budget.
Previous August 2024 update
Following a settled period in respect of oil prices, which have been falling since June and throughout July, oil markets are now on tenterhooks following the assassination of Ismail Haniyeh, a Palestinian politician and the political leader of the terrorist group Hamas.
Haniyeh was assassinated, along with his bodyguard, in the early hours of Wednesday morning this week in a predawn strike on Iranian soil. His death came less than 24 hours after Fuad Shukr, the most senior military commander of the Lebanon-based militant group, Hezbollah, was killed in an Israeli strike in Beirut.
Rising speculation
Fear is that this could turn the 10-month-old war In Gaza between Israel and Hamas into a wider Middle East War, with concerns growing of retaliation which could threaten the stability of the region. According to the BBC, 'Iran has threatened 'harsh punishment' for Israel', and Israel's Prime Minister, Benjamin Netanyahu, said his country had delivered 'crushing blows' to its enemies in recent days and that 'challenging days lie ahead'.
This leads to speculation that the region's oil supply could be disrupted – according to the EIA (the HS Energy Information Administration), The Strait of Hormuz which straddles Iran on one side and Oman on the other is the ‘world’s most important oil chokepoint’, connecting the Persian Gulf with key maritime shipping routes.
What's happening with oil prices?
Crude prices have risen for the third consecutive day after the killing of Haniyeh. However, they have dropped back this morning, Friday 2nd August, in light of no immediate escalation in the Middle East and continuous demand concerns.
Should I buy now?
You may be wondering whether to buy your heating oil now, or wait until the autumn time. With the current low oil prices and the still-present threat of escalating tensions in the Middle East, teamed with the long history of tension between the two countries, our recommendation would be not to wait but to stock up now before the cold weather and potential price hikes arrive if you have room in your heating oil tank. Any further escalation of the conflict could cause oil prices to spike, as not only does Iran produce 4% of the world’s oil, it also has significant influence over the Straight of Hormuz, a shipping route that around a fifth of the world’s oil passes through.
For a quick online quote or to place an order, click here, or call us on 01423 770 666.
Previous June 2024 update
With the past few chilly days, we're all starting to wonder when summer will finally arrive. And as the cost of living crisis continues to impact us, we’re all looking at ways to cut down our spending on fuel. So choosing when to buy your heating oil has never been so prominent, and historically summertime has been a great time to buy your home heating oil, with lower demand often resulting in lower prices.
Many different factors influence the price of oil. With so much ongoing conflict in oil-producing countries and disruption to supply routes in the Red Sea area, on top of the unpredictable economic climate and turbulent UK economy, it should come as no surprise that oil prices continue to be volatile. So here we’re going to take a look at what’s currently happening in the world of heating oil to help you make an informed decision on when to top up your heating oil tank.
Global Supply and Demand and what it means for the UK this summer
As summer approaches, demand for heating oil is set to fall in the UK due to warmer weather conditions. But what about global demand?
According to the latest report from the IEA (International Energy Agency), global oil demand is set to rise by 1.1 million barrels a day this year, whilst world oil supply is projected to increase to a record 102.7 million barrels a day. These predictions are based on the assumption that OPEC+ production cuts are maintained, but Reuters reported last week that Iraq, the second-biggest producer among OPEC members, won’t agree to new OPEC+ production cuts, which has been the source of some unease.
OPEC+ is set to meet again in Vienna on 1st June, and the IEA predicts that global oil demand will be a key topic for discussion – potential further production cuts would mean less supply on the global market and could trigger unrest amongst traders, leading to the potential for rising prices which would have a knock-on effect on UK domestic heating oil prices.
Buy now or wait?
Whilst typically UK heating oil prices are cheaper in summer and increase as the colder months approach, this isn’t set in stone and can’t always be guaranteed. Having said that, the last couple of months have seen a downward trend in prices, although of course, prices do fluctuate each and every day.
So what does the future hold? While we’re a long way from the heady oil prices we saw after the Russian invasion of Ukraine, continued political unrest could significantly impact future oil prices. The World Bank said earlier this month that oil prices 'have experienced considerable volatility amid intensifying concerns about the conflict in the Middle East, tight supply conditions in response to OPEC+ production cuts, and a strengthening of global industrial activity', and furthermore it's latest commodity markets report said: ‘A moderate conflict-related supply disruption could raise the average Brent price this year to $92 a barrel. A severe disruption could see oil prices surpass $100 a barrel’.
There really is no sure-fire way of knowing what’s ahead, but with continuing political unrest and instability in the Middle East, and the unpredictable economic climate, it’s certainly worth thinking about stocking up now if you have room in your heating oil tank. You can get a quote and place your order online, or call us on 01423 770 666.
Better to buy in bulk
Buying larger quantities will usually be more economical in the long term. Not only do suppliers often charge a higher unit price for low-quantity orders, but you may well save both money and time by ordering before potential price increases happen as we head towards the autumn.
Budgeting worries? Help is on hand
Of course, ordering a large quantity of domestic heating oil means a bigger bill but with the Northern Energy Premium Package*, help is on hand.
You can choose how you pay, with one option being to spread the cost over monthly interest-free instalments, helping your household budget and easing any anxiety or stress over big one-off bills at a time when, everywhere you look, prices are creeping up.
The great news is that the Premium Package also comes with additional benefits, such as a 2 pence per litre discount on every delivery, an upgrade to our Premium Heating Oil which provides greater boiler efficiency, and our Emergency Boiler Breakdown Assistance. To find out more, give us a call on 01423 770 666 and we’ll talk you through it.
*Terms and Conditions apply
Start preparing for winter now
Getting ahead and topping up your heating oil tank now is just one of many things you can do this summer in preparation for the colder months ahead.
A proactive approach to addressing potential issues such as by having your boiler serviced can reduce the likelihood of expensive breakdowns in the winter, will make sure it's ready for the cold weather and running at maximum efficiency, potentially extend its lifespan and cut down on harmful emissions too. A win-win!
There’s a lot you can do to tackle heat loss too, with some inexpensive and sustainable quick fixes that will make a difference to your pocket. Something we could all do with in these times of spiralling costs!
Of course, we’re always at the end of the phone and love nothing more than to have a chat with our customers, old and new. Don’t hesitate to get in touch if you’d like a quote, want to place an order, or just want some good old advice as to what’s happening with heating oil right now.
Previous December 2023 Update
With Christmas day just two weeks away, the countdown is now in full swing! So we thought we’d take a quick look at what’s happening now with heating oil prices as the demand for heating increases as we get closer to the big day.
The recent cold snap will have meant the many people who rely on heating oil to keep their homes warm will have used more than usual. The result – everyone wanting to place their pre-Christmas order, all at the same time!
It has also been reported in the media recently that several big shipping firms have halted all commercial shipments of oil and gas through the Red Sea, a key route for global oil shipments but one that has become increasingly dangerous over recent weeks. Houthis has been staging assaults against Israeli-owned and operated ships in the region as well as any ships heading for Israeli ports since October 7th this year. Read our full blog to learn more about the Red Sea crisis and it's affect on oil prices.
In this update, we’re going to take a look at how that affects the price you pay and why you should order now and not delay.
What’s happening to heating oil prices?
Domestic heating oil prices vary daily, and that has been especially true over recent times due to the unpredictable economic climate.
As we head into the winter months, increased demand will usually result in prices going up as, like with any commodity, prices are influenced by the basic principles of supply and demand. In the winter months, there is a higher demand for heating oil which can put seasonal pressure on prices. And with Christmas fast approaching, high demand can often put additional pressure on prices, meaning that December can be the priciest time to buy.
So what’s happening this December? Well, the good news is that this isn’t always the case as there are so many other factors that affect the price of oil. And whilst the cost of living crisis is continuing to impact us all, the good news is that heating oil prices are much lower than we saw when Russia invaded Ukraine back in February 2022 - a relief for many!
However, as we get nearer to Christmas, it has to be said that the general price trend is usually upwards, due to increased demand.
Don’t delay - why you should order now!
Increased demand doesn’t just affect prices - it can also lead to increases in lead times as everyone orders at once. So, suppliers often increase their delivery schedules. At Northern Energy, we usually work to up to a 5-day delivery timescale, but as we approach the holiday period, this often increases to up to 10 working days due to the increase in demand and the number of deliveries we need to make before we close for Christmas. And including today, Monday 11th December, there’s only 10 working days to go till the big day!
In addition, extreme weather conditions such as snow or ice can put additional strain on delivery schedules, leading to further delays. So get winter ready!
Why choose Northern Energy?
We’re not like other suppliers out there that only have a limited number of drivers, each of which can only do so many driving hours.
So why choose Northern Energy? - well, what makes us different is that our Chairman, our Managing Director, and our Sales Directors can all jump in a wagon and help out with the pre-Christmas rush!
And they’re all out and about delivering today!
So you can be assured that if you place an order with us today, your delivery of heating oil will be with you before Santa comes down the chimney!
Don’t delay - order now!
So we urge you not to wait! With only 2 weeks to go, we’d advise you to check your heating oil tank level today, order your top-up now, and then you can sit back and relax, safe in the knowledge you’ll be nice and cosy throughout the festive period.
Call us on 01423 770 666, email us at helpoil@northernenergy.co.uk, or go online to place your order today.
Previous September 2023 Update
With the meteorological start of autumn on the 1st of September, it's feeling more like summer now than it has been for some time. However, with colder weather and dark nights on their way soon, we thought we’d have a quick refresher and take a moment to have a look at what’s happening with fuel prices at this current time, and whether it’s a good idea to top up now.
Trending upwards
So firstly, what’s been happening to heating oil prices over recent weeks?
Well, since the beginning of July, unfortunately heating oil prices have been on the rise. Although, it’s not all doom and gloom – the good news is they’re lower than this time last year. But knowing whether they’ll continue to rise as we head deeper into autumn really is a case of ‘how long is a piece of string?’.
Prices do typically go up in the winter months, as increased demand for heating oil due to us all switching our central heating on puts upward pressure on prices. Whilst not always the case, the cheapest months to buy can often be June, July and August, but there are no guarantees as we saw last year. The summer rule doesn’t always work as we saw when prices shot up as of April 2022 due to Russia’s invasion of Ukraine. However, it’s generally thought that topping up now before the cold weather is upon us makes good sense.
We must remember though that there are many factors that affect oil prices, such as geopolitical tensions, changes in global supply and demand, international events, the exchange rate between the US dollar and UK pound - and even the weather – it’s not just about supply and demand.
However, Reuters reported last month that oil had risen for the 6th straight week as global supplies tightened. This was due to Saudi Arabia extending a voluntary oil production cut of 1 million barrels per day, which will continue until the end of September. In addition, Russia has also elected to reduce its oil exports by 300,000 barrels per day from September. An UBS analyst wrote ‘We anticipate a market deficit of more than 1.5 million barrels per day in September'.
Time to check your tank
The decision to buy now or wait until later is not just down to price – it’s also dependent on your current heating oil levels. If your tank is full, you’ll need to wait until your level has gone down and there is sufficient room in your heating oil tank for a delivery.
The minimum you can order in England, Scotland and Wales is 500 litres, (this is the minimum volume approved by Trading Standards for bulk meters) so you will need to be sure that, when you place your order for heating oil, you can fit the minimum quantity into your heating oil tank.
It’s also worth remembering that it costs the same to deliver 500 litres as it does larger quantities, so often heating oil suppliers will charge more per litre for a smaller delivery. Therefore, it can be worth waiting a bit longer so you can order a bigger quantity – the more you can buy in one go, the better the unit price you’re likely to get.
The important thing is not to let your tank level get too low – especially in the cold winter months. Not only will you risk running out of home heating oil and being left in the cold, but as your level gets very low, there’s the risk that any silt that may have built up in the bottom of your tank is sucked through into your boiler, and may cause costly breakdowns.
Don’t leave it till last minute
Plan ahead!
Heating oil suppliers will often charge more for an emergency delivery. So don’t leave ordering until the last minute. Also, as we do head into the depths of winter, it’s worth remembering that a sudden drop in temperature and freezing conditions will lead to an increase in demand, push prices up, and can lead to longer delivery schedules, especially in snow and icy road conditions.
And avoid ordering in peak periods, like Christmas – instead, buy when demand is low.
Worried about large one-off bills? – We’re here to help
With our Premium Package* you can choose how you pay, but one option is to spread the cost over monthly interest-free installments, easing the worry of big winter bills, and helping your budget. And you’ll also receive a free upgrade to our Premium Heating Oil which is more efficient than standard heating oil by up to 15%, so makes your money go further.
So, there’s really no foolproof way of knowing whether to order now or wait – but buying when demand is low is always recommended. Prices vary from day to day, and we’re living in an unpredictable economic climate with ongoing conflicts in oil-producing countries. With demand for oil increasing as we head towards cooler weather, not to mention in countries such as China and the US, and the cuts in production which have just been announced by Saudi Arabia and Russia, we would suggest now is a good time to buy ahead for the winter.
Don’t forget, we’re always at the end of the phone, and happy to have a chat, provide you with a domestic heating oil quote whenever you wish so you can check prices, and tell you all about the fantastic benefits of our Premium Package, which also provides a 2 pence discount on every delivery.
Just give us a call on 01423 770 666.
*T’s and C’s apply
Previous June 2023 Update
We’re all feeling the pinch with the current cost of living crisis, and rising fuel and food costs. When it comes to heating oil, it’s often thought that summer is the best time to top up your tank. It might sound obvious, but demand is lower in the warmer months of the year, and rises in the winter as the cold weather draws in, but supply and demand is only one of the many factors that affects domestic heating oil prices. In this blog, we’re going to take a look at what’s happening with fuel prices and whether it’s a good time to buy ahead of winter.
What have heating oil prices being doing over the last few months?
Over the last few months, we’ve seen home heating oil prices fall from the heady heights we saw in early 2022, which were triggered by the invasion by Russia of Ukraine. The recent fall has been for a number of factors, which include an increase in global oil production, as well as easing of geopolitical tensions.
Which has come as welcome relief for the many households across England and Wales that heat their homes with kerosene heating oil only, some 865,940 homes according to the Office for National Statistics Census 2021.
There are many advantages to living off-grid, such as being better for your health with cleaner air quality, and then there’s being at one with nature, but the benefits can be off-set when faced with worryingly high fuel bills. So, it's no wonder lower prices have been gladly met by many.
Will oil prices come down further?
Knowing whether to fill your heating oil tank now or hang on in the hope that prices will fall further is a tough one!
It's important to note that prices are volatile and can fluctuate significantly from month to month. One of the major factors that affects oil prices is supply. And another is OPEC.
What is OPEC?
OPEC (Organisation of the Petroleum Exporting Countries) was formed in 1960 as a cartel with the aim of fixing the worldwide supply of oil and its price. In 2016, it joined forces with 10 other oil producers to create Opec+, a group of major oil producers, and today Opec+ countries produce around 40% of the world’s crude oil, according to the BBC news. It’s decisions to increase or reduce oil production often go hand in hand with increases or falls in the price of heating oil.
Kate Dourian, of the Energy Institute, said ‘Opec+ tailors supply and demand to balance the market.’ She continued ‘It keeps prices high by lowering supplies when the demand for oil slumps.
OPEC production cut announcement
Saudi Arabia is one of the oil suppliers within the OPEC+ group, and is in fact the biggest, producing more than 10 million barrels of oil a day.
And on Sunday this week, Saudia Arabia announced an unexpected and voluntary cut in crude oil production of 1 million barrels a day (bpd) to take effect in July 2023. This recent cut was said by OPEC+ ‘to achieve and sustain a stable oil market’.
Whilst it was announced the cut would be for just one month, it would be extended. And OPEC+ suggests production targets will drop by a further 1.4 million bpd from July 2024. Some other OPEC+ members have followed suit.
How will this affect current oil prices?
There’s no surprise that such announcements can create uncertainty in the markets and can ultimately affect heating oil prices. When OPEC increases production, prices tend to fall, and equally when they make the decision to cut production, prices can rise. However, it’s important not to lose focus on the fact that there are many other factors that influence the price of heating oil, such as the weather, exchange rates, Brent crude oil prices and conflict in oil producing countries, to name a few.
Of course, demand is lower in summer months, and it’s unclear how this cut will affect oil prices over the coming months. Although some experts are predicting that this production cut may force prices to rise. David Fyfe, from the oil industry research group Argus Media, has speculated the most recent cut on production may cause prices to rise above the $80 a barrel mark, although this is still hugely lower than when it rose to $130 a barrel following Russia’s invasion of Ukraine in 2021.
Should I top up my tank now?
Well, with prices having fallen over recent months, if you have room, whilst there’s never any guarantees what heating oil prices will do in the future, it’s a great time now to top up your home heating oil tank. Whilst in the past, prices have tended to drop when there’s less demand, this summer rule doesn’t always work. And remember, the golden rule is to never let your tank get too low, whatever the time of year, but especially important in the winter months.
If you would like a competitive quote to top up your heating oil tank, just give us a call on 01423 770 666 or alternatively click here.
No room in your tank? No worry!
Of course, to be able to take a top up delivery, you need to have the space available in your tank. But if you don’t have enough space, bearing in mind the minimum order is for 500 litres, all is not lost, and there are still things you can do to prepare for the colder winter months.
Our Flexi Saver Plan can help you avoid the worry of big winter bills. By saving as much or as little as you want each month, with easy and flexible direct debit payments, you can save ahead for your winter heating oil, making the bills easier to pay when the time comes.
As the name suggests, it’s flexible. And if there’s any shortfall in your bill when you come to order your heating oil, you just pay the difference. It’s as simple as that. And if at any time you want your credit balance refunding, we’ll refund your saved money straight back to you.
In addition, we’ll upgrade you to our Premium Heating oil as a benefit of being a Flexi Saver Plan customer – it’s up to 15% more efficient, so better for your boiler - and better for your pocket too.
And there’s no hidden joining fees or ongoing service charges!
Click here to find out more, or call our friendly customer service team on 01423 770 666.