Factors affecting heating oil prices

The biggest factors affecting the price of heating oil are the price of oil on the stock market and (since oil is priced in US dollars) the US$/GBP exchange rate.

If the stock market price for oil remains the same but the value of the British pound against the US dollar goes up then your pound can buy more oil - it gets cheaper.

Demand is also a factor. Some distributors make no secret of the fact that they lower their margins at quiet times such as summer.

However a good example of why this can be less important was in the year 2008. During the summer of 2008 when crude oil went over US$140 a barrel, 900 litres of heating oil reached around £600. However by Christmas, despite being much colder, the stock market price was reduced and the price of heating oil was almost half.

Stock Market

Exchange Rates