Premiere with “surprise” prices makes tomorrow Friday, October 13 the heating oil. The estimates for the prices were overturned within 20 days. The international price after the initial “burst” when hostilities broke out between Israel and Hamas, it began to level off.
The latest estimates of the oil market executives want the price that the big companies will sell from tomorrow Friday to be at the level of 1.35 euros per liter, roughly the same as last year’s levels.
In fact, the price of Brent is returning to a downward path, given that commodity “players” have estimated that the risk of a general “ignition” in the Middle East region or a problem in the flow of “black gold” is limited.
The demand
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Of course, the demand in the first days is expected to be subdued.
Mild weather does not favor oil orders as many households rush to buy when temperatures drop.
According to market players, it is not excluded that some will rush to close oil quantities in order to ensure prices.
Heating allowance
Regardless of how the prices will move now, for the winter season 2023-2024 a heating allowance will be granted at the same levels as last year but with expanded income criteria for families with children, while there will be a new income “cutter” for freelancers.
For the new winter season, the following apply to the heating allowance:
- The amount of the allowance starts from 100 euros and reaches 800 euros depending on the region and the composition of the household
- The income limit remains at 16,000 euros for the unmarried and at 24,000 euros for the married but increases for families with children from 3,000 euros for each child to 5,000 euros for each child. Therefore, the income limit for a household with one child is set from 27,000 euros to 29,000 euros, for a household with two children the income limit rises from 30,000 euros to 34,000 euros and for a household with three children the income criterion increases from 33,000 euros to 39,000 euros.
- A turnover limit of 80,000 euros per year is set for the first time for natural persons carrying out business activity. Practically speaking, freelancers and self-employed persons who showed gross income from their profession of more than 80,000 euros in their tax return this year are automatically excluded from the heating allowance.
Plan B if international prices “escape”.
The Government, however, closely monitors the developments so that if things “get out of hand” in the Middle East and, by extension, international oil prices, it will activate Plan B for fuel prices: The Ministry of National Economy has set a specific price limit above from which an “alarm” will sound and the pump subsidy method will be adopted again this year, in order to ensure low heating prices for households.
This level is determined in the region of 1.70 euros per liter for heating oil and around 2.30 euros for unleaded and motor diesel: In other words, the price subsidy will only be activated if retail prices exceed these levels.
In this case, the Ministry of Finance is very likely to intervene with a subsidy at the pump similar to last year, in order to lower the cost to consumers.
Let us recall here that last year, shortly before heating oil entered the market, with an amendment by the Ministry of Finance, it was – initially – for the period from 15.10 to 31.12.2022 to be subsidized by the State Budget, the cost of internal combustion-heating oil available in internal market from 15 October 2022 to 31 December 2022. The amount of the subsidy was set at 0.20 euros per litre.
Thus, a key role in shaping the final oil price was played by the subsidy of 25 cents per liter (including VAT) at the pump, which was aimed at shaping the price of heating oil at lower levels.
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– What factors are contributing to the recent stabilization of heating oil prices?
Heating Oil Prices: Surprise Prices, International Trends, and Government Support
As the winter season approaches, heating oil prices are making headlines. After a brief period of uncertainty, market executives predict that prices will settle at around 1.35 euros per liter, similar to last year’s levels. But what’s behind this stabilisation, and how will the government support households with heating costs?
International Price Trends
The initial surge in heating oil prices following the Israel-Hamas conflict has given way to a more stable market. The price of Brent crude oil, a key indicator of global oil prices, is retreating from its peak. Commodity market players believe that the risk of a general escalation in the Middle East or disruptions to oil supply is limited, contributing to the downward trend in prices [[3]].
Demand and Market Dynamics
Demand for heating oil is expected to be subdued in the short term, thanks to mild weather conditions. Typically, households wait until temperatures drop before placing orders, which can lead to price fluctuations. However, market players predict that some households may rush to secure oil quantities to lock in prices, potentially influencing market dynamics [[2]].
Heating Allowance: Support for Households
Regardless of price fluctuations, the government has announced that heating allowances for the 2023-2024 winter season will remain at the same levels as last year, with expanded income criteria for families with children and a new income threshold for freelancers. The allowance amounts range from 100 euros to 800 euros, depending on region and household composition. Income limits for unmarried individuals remain at 16,000 euros, while married couples have a limit of 24,000 euros. The new income threshold for freelancers is set at 80,000 euros per year [[1]].
Plan B: Government Support in Case of Price Surge
The government is closely monitoring international oil prices, prepared to activate Plan B if prices “get out of hand” in the Middle East and, by extension, globally. If retail prices exceed 1.70 euros per liter for heating oil and 2.30 euros for unleaded and motor diesel, the Ministry of National Economy will implement a pump subsidy method to ensure low heating prices for households. This support is similar to last year’s initiative, which aimed to lower the cost burden on consumers [[2]].
As the winter season approaches, households can take comfort in the government’s commitment to supporting them with heating costs. With international oil prices stabilising and a comprehensive support package in place, households can prepare for the winter months with confidence.
Tracking Heating Oil Prices
Stay informed about the latest heating oil prices and trends with online resources, such as BoilerJuice, which provides daily price charts and group buying options to help households save money and the environment [[1]]. For a broader view of the commodity market, investing websites like Investing.com offer live Heating Oil prices, market metrics, and trading details [[2]]. For historical data and news on heating oil prices, Trading Economics is a valuable resource [[3]].
By understanding the complex interplay of factors influencing heating oil prices and the government’s support measures, households can make informed decisions about their energy needs and stay warm this winter.
What are the main factors influencing the recent stabilization of heating oil prices?
Heating Oil Prices: A Comprehensive Guide to Recent Developments and Trends
As the winter season approaches, heating oil prices have become a hot topic of discussion. The recent stabilization of prices has brought a sense of relief to consumers, but what factors are contributing to this trend? In this article, we will delve into the latest developments in the heating oil market, explore the demand and supply dynamics, and discuss the government’s plans to mitigate the impact of price fluctuations on households.
The Demand for Heating Oil
The demand for heating oil is expected to be subdued in the initial days, mainly due to mild weather conditions. Many households tend to rush to buy heating oil when temperatures drop, which means the demand is likely to pick up as winter sets in. However, some consumers may choose to close oil quantities to ensure prices, which could affect demand patterns.
Heating Allowance: What’s Changing for 2023-2024
For the upcoming winter season, the heating allowance will be granted at the same levels as last year, with some changes to income criteria for families with children and freelancers. The allowance will start from 100 euros and reach up to 800 euros, depending on the region and household composition. The income limit remains at 16,000 euros for unmarried individuals and 24,000 euros for married couples, with increases for families with children. Freelancers and self-employed individuals with a gross income of over 80,000 euros will be automatically excluded from the heating allowance.
Plan B: Intervention in Case of Price Escalation
The government is closely monitoring international oil prices, and if they exceed certain limits, it will activate Plan B to ensure low heating prices for households. The Ministry of National Economy has set a specific price limit of 1.70 euros per liter for heating oil and around 2.30 euros for unleaded and motor diesel. If retail prices exceed these levels, the Ministry of Finance will intervene with a subsidy at the pump, similar to last year.
Recent Stabilization of Heating Oil Prices
The latest estimates suggest that the price of heating oil will be around 1.35 euros per liter, roughly the same as last year’s levels. The price of Brent is returning to a downward path, as commodity players estimate that the risk of a general “ignition” in the Middle East region or a problem in the flow of “black gold” is limited.
International Prices and Their Impact
The international price of heating oil has a significant impact on domestic prices. According to the US Energy Information Administration (EIA), heating oil and propane prices are collected on the second Monday of each month from April to September [[2]]. This data is essential in understanding the trends and patterns of heating oil prices.
Heating Oil Futures: A Key Indicator
Heating oil futures prices are a crucial indicator of the market’s sentiment. According to Investing.com, the live heating oil price and key market metrics can be accessed to gain insights into the market trends [[3]].
Conclusion
the heating oil market is experiencing a period of stabilization, and the government is taking measures to mitigate the impact of price fluctuations on households. Understanding the demand and supply dynamics, government interventions, and international prices is essential in making informed decisions about heating oil purchases. Stay tuned for more updates on heating oil prices and trends.
References
[1] BoilerJuice. (n.d.). Home Heating Oil Prices & Charts UK.
<a href="https://www.eia.gov/dnav/pet/petpriwfraEPD2FPRSdpgal_w.htm”>[2] US Energy Information Administration. (n.d.). Residential Heating Oil Weekly Heating Oil and Propane Prices.
[3] Investing.com. (n.d.). Heating Oil Futures Price Today.
