Global crude oil prices soared to their highest point in eight years after Russia invaded Ukraine in late February. As you probably know all too well by now, as the price of crude oil goes, so goes gasoline, heating oil and the many other products derived from it.
This latest news seemed as if an unseen force somewhere was taking pleasure in piling on more misery for consumers already exhausted by two years of surviving a pandemic. Prior to this, energy prices in all sectors—oil, propane, natural gas, and electricity—had been on a steady rise because global oil production hadn’t yet caught up with the pent-up demand that quickly followed the perceived end of the pandemic.
Even before the war in Ukraine further accelerated price increases, frenetic consumer spending–combined with persistent supply shortages–had sent inflation rates in our country to their highest level in 40 years.
The only good news is that this shocking price spike occurred near the end of winter, instead of the beginning. You can view a heating oil price update from the U.S Energy Information Administration by going here.
You can also check out the history of heating oil prices in Massachusetts here.
So how did we get here and where are we going now?
As was noted before, global crude oil production hasn’t yet caught up with pent-up demand. So, why can’t we just drill for more oil at home?
It’s not that simple. First, even if the U.S. did drill for enough oil and keep it all here to gobble up for ourselves, that crude oil would still be tightly married to the global oil market—and beholden to whatever the world’s highest bidder is willing to pay for it.
This “solution” is also ignoring the fact that right now, oil companies are feeling enormous pressure to give up fast growth in favor of steadier profits and stock-boosting finance moves, such as higher dividends, more share buybacks and reduced debt. Read more about this here.
Investors have also been reading the tea leaves, and realize that a zero-carbon emissions world is not too far off in our future. Big money is holding back on fossil fuel investments as legislators try to move the country toward more renewable energy. Investors instead are looking to sink their money into long-term, profitable opportunities in the burgeoning green energy field. By the way, the heating oil industry is making excellent progress with making our fuel more dependent on renewable energy, too. Read about the benefits awaiting us in the future with Bioheat® fuel.
When prices spike like this, people tend to think that their local heating oil company makes more money. In fact, the opposite is true. Customers cut back on fuel use, and they have trouble paying their bills. Meanwhile, heating oil companies have to pay their suppliers within a few days at much higher rates. Supply chain issues remain a big challenge to overcome. It’s an awful mess for everyone.
Although your local heating oil company cannot control world energy prices, they do have some ways to make things a little easier. Consider your Massachusetts heating-oil company your energy-saving partner.
During the heating season, your full-service heating-oil company will always maintain and ensure an ample supply of fuel to make sure you stay warm and safe.
Your local heating-oil company may be able to make life easier with automatic deliveries of fuel so that you don’t have to worry about calling for deliveries or running out of fuel when you need it the most.
To take away any worries about the normal ebb and flow of oil prices, contact your heating-oil company. Many companies offer programs designed to save you money and keep your heating bills manageable—no matter what happens with world oil prices or heating-oil prices in Massachusetts.
Rest assured, your Massachusetts heating oil supplier will do everything possible to ensure that they can make deliveries—no matter the cost or difficulty they face.
We don’t know where things will go from here, but if history is a guide, we can expect to see prices drop pretty significantly in the not-too-distant future. If you would like to read the U.S. Department of Energy’s short-term energy outlook, please go here.
Nothing will make your local Massachusetts heating oil company happier than when prices return to normal. Until then, trust your heating oil supplier to look out for you and let’s hope that—regardless of what happens with energy prices—we will soon be living in a more peaceful world.