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.
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
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.