‘Can’t Wait to Heat My House in Connecticut This Winter’: Odd Lots Host as Heating Oil Hits $4.79 a Gallon, Up 113%
Heating oil costs more than twice what it did last fall, and the choice your dealer offers this month could easily cost you over a thousand dollars more than doing nothing. Here is what the spot price does not tell…
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Tracy Alloway, co-host of Bloomberg’s Odd Lots podcast, summed up the pain: “Can’t wait to heat my house in Connecticut this winter.”
No. 2 heating oil at New York Harbor closed at $4.79 a gallon on Sep. 29, up 113% from a year earlier. If your house burns oil, fuel costs more than twice what it did last fall before your dealer adds anything.
Kang’s “Relief” Leaves Heating Oil 37 Cents Off Its Record
The guest was David Kang, who ran treasury and risk management at Qatar Airways from 2011 to 2013. Russia is “the second biggest diesel exporter on the planet,” and with that supply gone, “Europe is pretty short.” London gasoil prices have soared as a result.
The U.S. East Coast buys diesel from Europe as a buffer because Gulf Coast refineries can only ship product to New York Harbor by sea. Kang said Washington’s export-ban talk made U.S. heating oil “come down instead of go up.”
Heating oil topped out at $5.16 on Sep. 15 and has fallen about 37 cents, leaving it 7% below the record.
It still sits in the 96th percentile of its range. A homeowner pays whatever the price is when the truck shows up.
Fuel Prices Drive What You Pay for Your Tank
WTI crude averaged $84 a barrel in August versus $65 a year earlier, a rise of about 29%. Heating oil rose far faster. The gap between crude and refined fuels is called the crack spread, where the Russia-Europe shortage shows up. When news says oil is “easing,” that tells you little about your heating bill. What you burn is priced as fuel.
The $4.79 figure is a wholesale spot price at New York Harbor. Delivered prices in New England add trucking, dealer margin and taxes, trailing the spot market. Fall quotes carry the late-summer run-up from $3.775 in early August.
A 700-Gallon Winter Now Costs Nearly $2,000 More in Fuel Alone
A home burning 700 gallons a season costs $3,352 at spot prices before markup.
Those gallons at January’s low of $1.94 would have cost $1,361, a difference of $1,992 in wholesale fuel for the same heat.
Locking In a Price at the 96th Percentile Can Backfire
Dealers offer three options: fixed price prepaid, capped price with a fee, or will-call at market rates. Which wins depends on where prices go after you sign. Using 700 gallons:
- You lock near today’s level and prices climb back to the September record. You save about $262.
- You lock and prices fall back to the 2026 average of $3.23. You overpay by about $1,091.
The possible loss is several times bigger than the possible gain. A U.S. diesel export ban has set off global alarms, while Russia says it will consider partially lifting its diesel export ban if it overproduces. A cap or partial lock usually makes more sense than a full fixed-price prepay, keeping protection against a new record without locking every gallon at a near-record price.
Run These Numbers Before Your First Fill
- Total last winter’s gallons. Pull delivery tickets or your dealer’s online account and add up gallons. Multiply by this fall’s quote for a budget based on your house.
- Ask how your price is set. Ask your dealer what they charge per gallon above New York Harbor spot. If spot falls and your quote doesn’t, the difference goes into dealer margin.
- Compare the cap fee with the upside. A cap is worth paying for only if the fee is clearly smaller than what you would save if prices return to the record, about $262 on 700 gallons.
- Split your gallons. Lock half your expected use and buy the rest at market. If prices spike, you are covered on half. If they fall, the other half gets the lower price.
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Jake has been been working in financial media for almost 15 years. He focuses on all things personal finance for 24/7 Wall St. with high hopes to educate and entertain. Most recently, Jake spent 12 years working various roles at The Motley Fool. He started copy editing fool.com content, worked on premium and marketing campaigns, and helped launch The Ascent, a personal finance brand.
His work has been featured on platforms like MSN, Yahoo Finance, USA Today, and more. He's written about credit cards, social security, ETFs, savings accounts, and just about anything else you can imagine when thinking about money. Jake love to cook, play golf, and tell people he's never had a cavity. (It's true!)
