Mild winter reduces prices from record highs

Weather events hit renewables harder than traditional fossile fuels, but weather does sometimes have an effect supply and demand and thus prices. 

In November 2022 the price of heating oil had increased by 68.5% year over year.

The price increase was due to low inventory, the fact that several refineries were damaged by hurricanes and a shortage of labor, according to Hugh Daigle, a professor at the University of Texas at Austin’s petroleum and geosystems engineering department. 

– Refinery capacity is still lagging. And on top of that, there’s a lot more demand now from Europe, since it’s moving away from Russian oil. When you are competing with European consumers who really need these products, that really puts a squeeze on American consumers, he said at the time to marketplace.

Mild winter

But due to a mild winter, prices have fallen significantly. The price of heating oil is down to 4.47 USD a gallon in the first week in February 2023 after hitting a record high of 5.93 USD per gallon in November.  

Another factor affecting the price of heating oil is that crude oil prices have been falling. 

– Heating oil is a refined product that comes from crude oil. So those prices are going to move at least somewhat in sync, said Ryan Kellogg at the University of Chicago.

But even if prices have come down in recent times, they are still high for some consumers. 

Mark Wolfe at the National Energy Assistance Directors Association notes that the price is still expensive saying: 

– There are some glimmers of Gee, it’s not as bad as we thought it was going to get. But it’s still high. A lot of people are turning to the federally funded Low Income Home Energy Assistance Program — or LIHEAP — for help paying their heating bills.