As the United States enters winter, home heating oil prices continue to fall near record highs. Colder-than-expected winter weather, the global oil supply crisis and pandemic supply issues are delivering staggering energy bills for homeowners across the United States.
If you’re facing higher energy bills, take a look at our guide to saving energy at home, including heat pumps vs solar panels, ovens vs fryers, electric heaters vs radiators, microwaves vs fryers, wood-burning stoves vs central heating, plumbing. vs oil heating, dishwasher vs hand washing, and monitoring how to save energy bills.
Home heating oil prices: weekly trends
The current national average for heating oil prices is about $5,147/gallon on November 28, according to the US Energy Information Administration. After reaching a historical peak in early November 2022, prices have eased but remain at historical highs. Here is the weekly schedule from October 2022:
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| Date | US heating oil prices average. (USD/Gallon) |
|---|---|
| 11/28/22 | $5,147 |
| 11/21/22 | $5,431 |
| 11/14/22 | $5,783 |
| 11/07/22 | $5,902 |
| 31/10/22 | $5,836 |
| 10/24/22 | $5,699 |
Home Heating Oil Prices: Why So High?
The cost of home heating oil has more than doubled since the 2000 low of $2.06 in the winter of 2015/2016, according to Statista. The highest value of YCharts in November 2021 was 3.36 US dollars. The price is now above $5, a mark they have not crossed since March 2022, shortly after Russia invaded Ukraine and started the global energy crisis.
The increase in cold increases the demand and therefore the price of heating oil every winter, covering the period from October to March. According to the Energy Information Administration, a homeowner in the Northeast may use 850 to 1,200 gallons of heating oil during a typical winter and spend less the rest of the year.
Oil accounts for 58% of the cost of heating oil, and the war in Ukraine and related energy sanctions against Russia have pushed up oil prices overall. Additional energy demand from China as the Covid-19 lockdown is gradually lifted is putting further pressure on oil prices. Problems in the US supply chain with the availability of tankers and trucks could raise the cost of transporting oil.
Some US states rely more on heating oil than others, which affects regional prices. The North Atlantic region, from Maryland to Maine, relies more on heating oil than natural gas to heat homes, exposing the region to fluctuating global oil prices.
Many of these north-eastern states rely on heating oil stations and infrastructure that are decades old. Three-fifths of Maine households use oil as their primary source of energy for home heating, a larger share than any other state, according to Quartz. This dynamic is one reason why residential energy costs are 15.4% higher in the Northeast than in the United States, where energy costs have begun to decline.
Home Heating Oil Prices: What’s Next?
The Energy Information Administration (EIA) expects the price of residential fuel to remain around $5.00/gallon through 2022. It also expects that these high heating oil prices and the higher consumption due to colder-than-average winters will increase heating bills for affected homeowners. 45% compared to last winter.
The Biden administration is considering stockpiling 1 million barrels of heating oil as winter approaches and market price uncertainty worsens, according to NBC News. The White House is also considering ways to build up additional heating oil stocks that the administration could release if supplies tighten or prices rise again.
The EIA expects the U.S. economy to grow slightly to reduce oil prices during the first half of 2023.
In the meantime, with rising energy costs affecting every part of the United States, homeowners should seriously consider home energy audits to find significant savings in their monthly bills.
