Are you dreading the thought of having to pay a high price for heating oil this winter? If so, now is the time to lock in a guaranteed low price. With the right plan, you can get the peace of mind of knowing that you’re getting the best price for your heating oil, no matter what the market does. In this article, we’ll discuss why it’s important to lock in a low price for heating oil, and what you can do to make sure you get the best deal. Don’t wait until the last minute to make sure you’re paying the lowest price for your heating oil this winter – lock in now!
What is a lock-in heating oil price?
A lock-in heating oil price is a type of fixed-price agreement between an oil supplier and a customer. The customer agrees to purchase a predetermined amount of fuel oil from the supplier at a fixed price per gallon over a specified period of time. This ensures that the customer is protected from sudden increases in the price of fuel oil.
How long is the lock-in period for heating oil prices?
The lock-in period for heating oil prices can vary greatly depending on the supplier and the specific type of contract. Generally, the lock-in period is between one to six months, with some contracts offering up to a one-year lock-in period. It is important to check with your supplier about the terms of their contract before signing.
Are there any benefits to locking in heating oil prices?
Yes, locking in heating oil prices can provide benefits for both consumers and suppliers. The primary benefit for consumers is that they can guarantee that their heating costs will remain fixed for a set period of time. This means that they can budget their heating costs more effectively and avoid any potential price increases. By locking in prices, suppliers also benefit from increased stability and assurance that they will receive their payment in a timely manner. Additionally, they can provide better deals and discounts to customers who are willing to lock in prices.
What factors influence the current lock-in heating oil prices?
The current lock-in heating oil prices are influenced by several factors, including the global supply and demand for oil, the state of the world economy, the geopolitical environment, and the weather. Other factors such as the cost of production, refining, and distribution also have an effect on the current lock-in heating oil prices. Additionally, the availability of alternative energy sources can also influence the price of heating oil.
Are there any risks associated with locking in heating oil prices?
Yes, there are risks associated with locking in heating oil prices. The price of heating oil can be volatile due to changes in the weather, regional supply and demand, and other unforeseen factors. If the market price of heating oil rises after you have locked in a price, you may have to pay more than the market price for your heating oil. On the other hand, if the market price of heating oil drops after you have locked in a price, you may have to pay more for your heating oil than you would have if you had waited to purchase it at the market price.
Many companies featured on Money advertise with us. Opinions are our own, but compensation and in-depth research determine where and how companies may appear. Learn more about how we make money. Cheap crude oil, which is saving drivers big money at the pump, is also saving homeowners substantial cash on heating bills this winter. In some cases, cheap oil has pushed natural gas prices lower as well. So why might some homeowners be upset that heating costs are getting cheaper? Well, you might be peeved if you had bet that those costs would increase this winter. And thats essentially what many homeowners in the Northeast did months ago, by locking in oil prices at the going rate last summer or fall. Companies that service homes with heating oil often give customers the option of signing a contract to lock in prices. Essentially, its a hedge against the generally strong likelihood of oil prices rising as winter sets in and demand soars. Except that locking in oil prices didnt save money last winter. Instead, homeowners who locked in prices based on the levels being commanded in July or October wound up paying more for oilbecause prices actually decreased during the winter. Its the same story for the winter of , only homeowners who locked in prices months ago stand to lose out on far bigger savings, as heating oil prices have, well, tanked. In this case, some gamblers bet that oil prices would rise in the winter. Not long ago, that would seem like a fairly safe bet. Perhaps unsurprisingly, homeowners are growing reluctant to use fixed-pricing contracts to lock in heating oil prices. In the past, maybe half of Keyser Energys customers opted for them. Lately, however, only one-quarter are doing so, NPR reported. And at least for this winter, it turns out that the smart bet was placing no bet at all. Brad Tuttle is a senior editor at Money who covers shopping, retail and general news. He also teaches journalism part-time at UMass-Amherst. Published Jan 26, 3 min read. Peter DazeleyGetty Images. Ask The Expert Sign up for ask the expert and more. Sign Up Now.
Home heating oil is certainly a major expense for many homes in the Northeast. While it generates significant heat per gallon, it can still lead to some high energy bills in the winter months. Heating oil prices can actually be more complicated that you may expect. The first question is whether you are on automatic delivery or will-call. We break down the pros and cons of automatic heating oil delivery here. The bottom line will-call is much less expensive than automatic delivery. If you opt for automatic delivery for the convenience factor, you can expect to pay more no matter what. That said, you should understand the types of pricing you may be offered. This rate is usually determined very simply by the heating oil dealer. The market price for a will-call customer is nearly always less and usually a lot less than for automatic delivery customers. This is because the will-call market is much more competitive. You can check heating oil prices at any time on FuelSnap. Some dealers will offer a fixed price per gallon. The way this works is you will agree to purchase a certain number of gallons at a predetermined price. The number of gallons is based on your estimated usage for the year. There is usually a fee for this, or the dealer mandates that you also buy a service contract from them which covers the fee. Because of the fee and the necessary contract purchase, this is a great deal for the oil company. As a homeowner, you may do well in some years, but be left over-paying in others. This one sounds the most-enticing of all you only pay up to a certain price. Remember, if it sounds good to be true, it probably is! First, you pay for this. Whether it is a fee up front, or via a padded oil price throughout the year that keeps you hovering around the price-cap amount, you are paying for this one way or another. Second, just like with the market price for oil, if you are on automatic delivery, the oil company has no incentive to lower the price when the market price falls. As a result, there may be a major lag between the market price falling, and automatic delivery customers seeing their prices lowered. For the best ways to save money on heating oil, take a minute and read this post here 10 ways to save money on heating oil. The best money-saving decision you can make is to switch from automatic delivery to will-call. If you want to lock-in a heating oil price for peace of mind, by all means, go ahead, but just know if will not be the most cost-effective choice in the long run! By clicking submit you agree to receive emails from FuelSnap. You may unsubscribe at any time. Skip to content. Types of Heating Oil Prices Heating oil prices can actually be more complicated that you may expect. Most heating oil companies offer both automatic delivery, and on-demand oil delivery known as will-call.