Will Heating Oil and Propane Prices Drop this Summer?
Price protection is open and customers are calling us to inquire about locking-in their heating oil and propane prices. For customers who locked-in last year, the first reaction we are getting is “Wow. Propane and heating oil prices are much higher this year than last year.” If you haven’t been following oil prices, the 30%+ increase since last summer can come as a shock.
Crude oil prices rose to over $110 in April due to real and anticipated economic growth from around the world, concerns of oil supply from the Middle East, and speculation. Since then prices have fallen to around $95 a barrel at the time of writing.
Where will heating oil and propane prices head this Summer?
Customers want to know what we think will happen to heating oil and propane prices this summer. Will they go down? Will August be a better time to lock in?
Many customers believe prices will fall, and that’s certainly a possibility. Unfortunately, not even the most well regarded experts know where prices are headed. Heating oil and propane prices may continue to go down this summer or they could go up. There constantly seem to be surprises in the news that affect heating oil and propane prices (e.g. emergency release of crude oil inventory reserves, lower than expected OPEC production, lower than expected growth of the Chinese economy, etc). Prices change with every new development and it’s hard to keep track of them all.
If you are interested, here are some factors that could make heating oil and propane prices go up or down this Summer. For a more complete list and a very detailed understanding of what makes crude prices go up and down, you can go to the US Energy Industry Administration and check out their extensive information on factors affecting crude prices.
What Will Make Prices Go Up or Down?
Higher Prices Lower Prices
• Higher than expected world economic growth
• A weaker US dollar
• Unrest in the Middle East
• Decreased OPEC production
• Lower than expected world economic growth
• A stronger US dollar
• A stable Middle East
• Increased OPEC production
Whether you choose to lock-in your heating fuel price or stay on a variable plan, you can take comfort in knowing that Irving Energy will provide you with the resources and information you need to make the best possible heating decision this heating season.
Check out our articles on heating oil and propane price protection consumer opinions, or answer the questions: is heating oil and propane price protection right for me? or what is heating oil and propane price protection?
Posted on July 6, 2011