Rising prices: When the heating oil tank empties

Status: 06/24/2022 08:27 a.m

The Ukraine war is causing energy prices to rise. Many homeowners wonder when is the best time to fill up their heating oil tank. Finding the right time is difficult.

In May, the demand for heating oil was huge, because at that time the oil embargo against Russia was being intensively discussed. Many consumers wanted to stock up in time before the prices went through the roof, reports the managing director of the comparison portal Heizoel24, Oliver Klapschus.

But now demand has plummeted. The market currently provides hardly any incentive to buy. “The reasons for this are the further rise in heating oil prices and the widespread beautiful summer weather. However, the number of market observers remains exceptionally high,” says Klapschus. Consumers are therefore watching what is happening closely, partly with concern as to whether they can still afford the oil.

Many factors affect the price

Finding the right moment and thus the right price is very difficult, says Christina Wallraf, energy market consultant at the NRW consumer advice center. The Ukraine war is a major reason for the currently very high prices, but there are many other aspects that determine the price.

“The rise in interest rates by the US Federal Reserve meant that crude oil prices went down. Concerns about inflation and recession are having a downward effect on prices,” said Wallraf. Nevertheless, the oil market is still undersupplied and will probably remain so for the next few months. “The main reason is the sanctions against Russia. But the OPEC group is also currently delivering less oil than planned.”

In addition, Russia’s shortage of gas supplies is also affecting oil prices. Many companies switched from gas to oil or gas oil, which is driving up demand for oil and thus prices, according to the consumer center expert. A price-lowering factor could possibly be the renewed lockdowns in China.

Currency rates also determine the price

Oliver Klapschus from Heizoel24 mentions another aspect that influences prices. “Oil is traded in dollars and is particularly expensive in Europe due to the ongoing slide in the euro.” The common currency is currently in the range of a five-year low against the US dollar, which makes oil imports even more expensive. “The strong interest rate hikes by the Fed in the USA and the hesitant action of the ECB in Europe should give the dollar a further boost and devalue the euro,” said Klapschus.

How the prices will develop is very speculative, says Klaus Bergmann, managing partner at the comparison portal esyoil. “It is therefore not possible to derive a recommended action for consumers that would save money. It always depends on the individual conditions anyway. The filling level of the tank is the essential component,” says Bergmann.

Strong fluctuations to be expected

The consumer center advises to watch the prices. Analysts and experts have different assessments for the coming months. Fall prices cannot be reliably predicted. Christina Wallraf assumes that prices will fluctuate greatly in the coming weeks. “This offers the opportunity to buy at slightly lower prices. Consumers should obtain the prices from several retailers, as there can be significant price differences. Ordering with neighbors can save a few percentage points,” says the energy expert.

Klapschus recommends consumers to rely on their gut feeling to a certain extent, but also not to ignore the facts and follow the latest news. “One way or the other, it is important not to panic. The supply situation for oil is definitely more comfortable than for gas. The transport logistics in the direction of northern, western and southern Europe are efficient. Customers are accordingly better protected against price explosions and supply bottlenecks,” says smack.

Speculate with a system

He recommends that those who speculate on lower prices should do so systematically. “That means defining an upper price, for example at 1.60 euros per liter, and pulling the ’emergency brake’ as soon as this is exceeded. A lower target price must be set, for example 1.20 euros per liter that you want to stock up on,” says Klapschus. There are various comparison portals on the Internet, such as Heizoel24, Esyoil, Fastenergy or Brennboerse.

It is also important for speculation to set a time window. “The rule of thumb here is: act by the end of the summer holidays. After that, it’s high season and rising prices and delivery times are inevitable,” says Klapschus.

Bergmann from esyoil recommends to everyone who is undecided: “If you need heating oil, you should buy preventively. It doesn’t have to be a complete filling of the tank:” So you could order a partial amount now and then get active again in winter.

And the further oil price development? That depends on the economic and currency risks, as well as heavily on the situation in Eastern Europe – and the progress of the Ukraine war.

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