The cost of home heating oil

amandstu · 05-09-2022 5:41pm #1

What should we expect in the coming months?

I hear that gas is going up but I also hear that oil may be going down.

Is the price of home heating oil not tied to that of gas ?

Obviously global politics (if an illegal invasion of an independent country can be so termed) will have the last say ...

Cabaal · 06-09-2022 9:29pm

Right now, you can expect to pay double what you paid for the same amount of oil as you did last year.

6 months from now, who knows. Might be the same, might be slightly less, might be 50% more.

L1011 · 06-09-2022 9:33pm

The cost of home heating oil is tied to crude oil; not gas.

I wouldn't be expecting any further price drops until/unless the war ends; but trying to predict the market is impossible

Subzero3 · 06-09-2022 9:55pm

When (or when it's finally acknowledged) the recession hits, OPEC will reduce output keeping price's stable.

walterking · 06-09-2022 10:07pm

I'm a bit of an anorak when it comes to oil price.

You are watching three variables -

Oil price (Brent crude)

Refining margins (usually steady, now very volatile)

Euro dollar exchange rate (really crap)

Oil is steady at mid nineties $

Exchange rate has been getting worse - it's under parity

Refining margins - used to oscillate between $5 & $15, so never made a huge difference. In the last 28 days it has been as "low" as $32 and as high as $64, and is currently $57.

Basically a barrel of kerosene (159 litres) is costing about $152. In euro per litre that's about 97c

Add carbon tax(10c), distribution margin (10-12c) and vat (13.5%) and you are at about €1350-€1380 for 1000litres.

No one knows how refining margins will move. They can drop $30 in a week or increase $30 in a week. As it's the refined product, the price feeds in very quickly - up and down. The €1200 price generally available around 18th-23rd Aug reflected the $32 "low" refining margin on and around 11th Aug.

who what when · 06-09-2022 10:12pm

Very informative, thank you

dohouch · 07-09-2022 12:48pm

https://www.boards.ie/discussion/comment/119581848#Comment_119581848

What is refining margin. Who get it? Shell , Total etc Is it the profit of the refinery owner? Why should it vary?

@walterking Thanks( oil prices for Dummies🤑)

Danno · 07-09-2022 2:46pm

You can follow market prices on that link above and get a sense for the trends.

walterking · 07-09-2022 8:39pm

https://www.boards.ie/discussion/comment/119583930#Comment_119583930

Refining margin is the difference between the refined price of a fuel and the barrel of oil.

Refining uses a lot of gas and usually runs on tight margins.

But it's a commodity and with diesel power stations running again because it's much cheaper than gas and also many industrial users moving back to oil from gas where they can, diesel and kerosene is in huge demand and refineries are working flat out - demand outstrips supply so refineries put prices up and people bid it up further.

Last July diesel margins were $5. The average is $10-$12. It's currently $55 but dropping a little ($62 last week) and may drop further as more capacity comes on stream.

Yes, the refiners (Exxon, Valero, Neste and others) made gigantic profits this year.

It will eventually all calm down. Europe is only 10% of the world's population and it is financially worthwhile to bring fuel from India, china and USA and as that feeds through prices will become more normal.

That in turn will calm gas prices and then inflation will fall.

When? No one knows, but I suspect 6-9 months