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Understanding the Heating Oil Market & Price Fluctuations

Fuel Price Spikes Can Be Distressing, But You Can Depend on Rucci

heating oil cost new yorkHeating oil, gasoline, and the many other products derived from crude oil are beholden to its price spikes on the global market. This is just what happened when Russia invaded Ukraine, causing crude oil prices to soar to over $100 per barrel for the first time in nearly a decade. This on top of already existing price spikes caused by supply shortages and inflation has definitely raised prices for heating oil customers. Read on to see how Rucci Oil can help you cope, and that we’re all in this together.

The spike in fuel prices is problematic for all of us, but with Rucci, you don’t have to worry about fuel run-outs and delays, and we may be able to help you with our budget plan, which we call EZ Pay, by spreading out your payments if you have trouble paying your bill. Read on to learn more about heating oil price fluctuations. Please reach out to us with any questions, so we can help you navigate this challenging time and brainstorm with you to find solutions.

No Easy Fix to Heating Oil Supply Shortages

Pundits and politicians in the U.S. like to offer a simplified and misinformed solution to supply shortages, claiming that drilling more oil domestically will solve the problem. But that’s ignoring the predictions put forth by experienced investors, who realize that a zero-carbon emissions world is not too far off in our future. Big money is holding back on fossil fuel investments as legislators try to move the country toward more renewable energy.

Market Volatility

Another factor influencing oil companies in this extremely volatile energy market is the memory of the shocking drop in crude oil prices towards the start of the pandemic. In spring of 2020, crude oil prices fell all the way to negative $30 per barrel! Traders had to pay buyers to take oil! Since then, however, prices have been steadily rising before they exploded in late February after the Russian invasion of Ukraine. But as quickly as mid-March, crude oil prices had dropped under $100 per barrel again. This was caused by a variety of factors, including the surprise COVID-19 lockdowns in China, small signs of a possible diplomatic solution to the Ukraine conflict, and the biggest drop in four years of “bullish bets” on the market by hedgers.

Russia’ Influence on the Market

Russia’s influence on the market stems from its role as one of the top three greatest petroleum and liquid fuels producers in the world. Because of Russia’s clout, energy prices began rising simply in anticipation of the potential sanctions on the Russian energy sector if the country invaded Ukraine. Even the hint of a possible disruption in the energy supply – in other words, the fear factor – can strongly affect commodities traders’ decision-making.

When Russia DID invade Ukraine, the U.S. was the first country to place a ban on Russian imported oil and petroleum products, which amounted to about 7% of U.S. imports in 2020 – not a huge portion. In contrast, Canada ranked number one with 52% of petroleum imports, according to data from the U.S. Energy Information Administration (EIA). But here’s where the fear factor becomes apparent: While Russian oil imported into the U.S. amounts to only a few drops in the barrel, the prospect of Europe eventually joining the U.S. in banning Russian energy imports would leave a big void to fill, and this uncertainty scares those who make their living in the oil markets.

What Can We Expect Next?

You may be asking, exactly where things will go from here. Unfortunately, it’s impossible to say for sure. Like you, we hope this spike is just temporary. Nothing will make us happier than when prices return to normal in Staten Island, Brooklyn, Bronx, Manhattan, and New Jersey and throughout the country. Until then, trust Rucci to look out for you when you become a customer.

For nearly 100 years, Rucci has been engaged in the business of keeping our customers warm in the winter, cool in the summer, and safe and comfortable all year long. Thanks to our loyal customers, we plan to be doing so for many more years to come. Together, let’s hope that—regardless of what happens with energy prices—we will be soon living in a more peaceful world, where families can be warm, safe, and together.