The U.S. Energy Information Administration (EIA) estimates households heating primarily with heating oil will spend about $60 less (3 percent) this winter (October 1 – March 31) than last winter. The Northeast accounts for the majority of U.S. heating oil consumption.  

Crude Oil Prices. Heating oil is refined from crude oil, and therefore follows crude’s price trends. Crude oil costs for U.S. refineries have risen since December 2011 to $116 per barrel this month. Last year at this time, oil was about $102 per barrel. The EIA forecasts that crude oil costs to domestic refiners will average around $115 a barrel this year.

Weather. Consumption of heating oil is down about 13 percent from last winter, due to this year’s unusually warm winter. Last winter a historic blizzard dumped several feet of snow across parts of the Northeast, and drove up demand where the majority of heating oil is used. Frigid temperatures generate a constant need for more heating oil and extended periods of continuous demand can draw on inventories, resulting in higher prices. Delivery problems like icy roadways and frozen waterways can slow supplies and drive up prices.