2016 was good news for the millions of heating oil users who benefitted from historically low heating oil prices. According to domestic heating comparison website sutherlandtables.co.uk, heating oil was consistently the cheapest fuel on offer through the year. At the end of the year however, prices began to increase following the OPEC meeting in November. In it’s report analysing heating oil prices for 2016, Boilerjuice tries to predict what 2017 has in store for households using heating oil in the UK.
Quarterly Heating Oil Price Comparison
The final quarter of 2016 showed no signs of bucking the trend of continued rising prices, and it’s no surprise considering that January 2016 saw the lowest ever heating oil price as recorded by BoilerJuice.
As the crude oil market begins to stabilise, prices have consistently increased each quarter. However, these past three months have presented somewhat of a surprise in that it was the steepest quarterly increase since 2010, representing a 21% jump from July/September to October/December. This is the third largest quarterly price increase in our history.
The reason why we saw such a steep increase? One word. OPEC.
There was a great deal of speculation leading up to the November 30th OPEC meeting. In turn, Brent crude oil saw sharp price increases, which led to a rapid increase in heating oil prices, accelerated further by the Brexit fuelled fall in the value of Sterling.
Where does 2016 sit historically?
Despite the steep increase in prices in the final quarter, 2016 did finish as the cheapest year on BoilerJuice records.
With an average price of 33.84 pence per litre for the whole of 2016 compared to the next cheapest of 35.64 pence per litre in 2007; 2016 represented amazing value as heating oil users were able to fill their tanks for rock bottom prices.
Where are heating oil prices heading?
The quarterly trend in 2016 was very similar to 2007. The first 9 months of 2008 saw some steep price increases overall, so if history is a guide to the future then 2017 would see the cost of heating oil increase.
But this is a difficult judgement to make given the delicate balance between supply and demand for crude. With a radical new US president promising production increases, concerns over Brexit, to say nothing of the approach from non-OPEC producers, there are a large number of factors affecting the price of heating oil in the UK that are not just to do with OPEC.
Source: Boiler Juice