Buy heating oil now?

The price of heating oil has fallen to its lowest level in 16 years. Is it worth accessing or waiting now? Last but not least, buyers should keep an eye on the American presidential election.

The low price entices you to order.

Dhe heating oil price in Germany has fallen below the 40 euro mark across the board and is therefore at a level similar to that of more than 16 years ago. The information portal Heizoel24 gives the average price at 37.30 euros per 100 liters (with a purchase of 3000 liters, including VAT), Esyoil even only at 37 euros.

Even if the Tecson portal calls a nationwide average price of 39.90 euros, this is not just a good 27 euros or around 40 percent less than at the same time last year. Rather, apart from a few days in January and February 2016, these are the lowest heating oil prices since July 2004.

Homeowners who can fill their tank with 3000 liters do not even have to pay 1200 euros for it. He saves more than 800 euros compared to the beginning of the year.

Two reasons play together that have caused the sustained fall in prices since the beginning of the year. On the one hand, the price of crude oil has fallen, from more than 60 dollars to around 40 dollars for a barrel (159 liters) of North Sea Brent since the beginning of the year. The decline is primarily a result of the collapse in global economic activity due to the Corona crisis, but also the sustained high level of funding by the states of the expanded OPEC and the United States, which could not agree on sustainable, effective funding cuts.

On the other hand, the euro is strong and the dollar is weak. Since May, the euro has risen by almost ten percent, from 1.08 to around 1.18 dollars. Because oil is paid for in dollars, Europeans can buy more oil for the same amount of euros. Calculated in euros, the price of Brent crude oil has fallen from 60 to less than 35 euros per barrel. Not only heating oil buyers notice this, but also motorists. According to the clever-tanken.de portal, a liter of diesel is currently available in Mönchengladbach or Velbert for less than one euro.

The heating oil dealers report brisk demand at the beginning of the heating season, although many heating oil customers filled their tanks in the spring after the first price slide. At the time, this initially prevented the price of heating oil from falling sharply, despite low oil prices.

Oliver Klapschus, managing director of heizoel24.de, wrote on Monday that “the autumn fuel oil supply is picking up speed”, but the number of orders remains far from any record levels. It is unusual that heating oil prices are so low in September of all times. Usually this is not the best month to fill the tank.

It might even be worth speculating that prices will fall even further. But that’s risky. Whatever is always possible, a partial filling must now be carried out. Even if prices should pick up again, you can secure part of the current low prices in this way.

Because heating oil prices will rarely be lower in the long term. Klapschus is contemplating that Corona could permanently lower global oil demand, especially since reducing CO2 emissions is a declared goal of politics in numerous countries. But alternative energies are all the more difficult the cheaper oil is.

In addition, the dollar tends to be weak in the run-up to American presidential elections, especially if the elections are tricky or tight. After the elections, however, there is almost always a disproportionate upgrade. The last time this did not happen was in 1976 – and that cannot really be used because the gold standard was not abandoned until 1973. In this respect, heating oil speculators should pay attention to the election result. If the situation is clear, an appreciation rally is not unlikely.

Otherwise, when buying heating oil, as with all major purchases, it is worth comparing. Internet platforms are helpful here. And it is also more of a myth that heating oil ordered on the Internet is of poor quality. If you don’t just order from a dubious black marketer, you will always receive DIN-standardized heating oil in an officially calibrated tanker.

It is true that there is bio-heating oil, super-heating oil and Ecotherm-heating oil – which are sometimes called differently – that can save emissions and, depending on the case, heating costs, because the types of oil burn better. These are also standardized. With low heating oil prices, however, better combustion could be an option for ecological reasons alone.

Heating oil can also be cheaper when placing a bulk order with the neighborhood.