A typical American household will spend about $920 on heating this October through March, essentially flat against last winter's $925. That national figure is useless to almost everyone, because what you pay depends entirely on what comes into your house. Natural gas households are looking at $677, down nearly 10%. Heating oil households are looking at $2,615, up almost 34%.

Why Heating Oil Broke Away

Heating oil is a distillate, the same family of fuel as diesel. When diesel crossed six dollars a gallon this month on the back of the disruption to global fuel flows, heating oil went with it. The two prices are bound together at the refinery.

Natural gas went the other way. Storage is running above its five year average and the spot price at Henry Hub is roughly where it was a year ago. Gas is a domestic market with its own supply picture, and it did not care much about tankers.

That divergence is the whole story of this winter. The same weather, the same thermostat setting, two completely different bills depending on a decision made decades ago by whoever built the house.

Who Is Exposed

Heating oil is concentrated in the Northeast, where a large share of older housing stock still runs on a basement tank. Those households are looking at roughly $660 more than last winter for the same warmth.

Electricity heated homes are in the middle at $908, up 2.4%. Propane households are at $1,950, down about 5%.

The Part You Can Still Change

Delivery fuels are the only category where you can buy ahead. Oil and propane are purchased by the tank, not metered by the month, which means the price you pay is the price on the day the truck comes.

Final Take

If you heat with oil or propane, call your supplier this week and ask two questions. What is the price for a fill today, and do they offer a locked price or a budget plan for the season.

Locking a price when the underlying fuel is up a third is not a market call. It is removing a large unknown from your winter budget, which is worth something even if the price later drifts down.

If you heat with gas or electricity, the price is set for you and the only lever is usage. The cheapest one is the thermostat schedule, because the hours nobody is home are pure waste and almost every modern thermostat can be set in ten minutes.

And whatever the fuel, ask the utility about a budget billing plan. It does not reduce the total. It stops January from arriving all at once, which for a lot of households is the actual problem.

A national average of $920 describes nobody. Find your fuel and plan for that.

Written by Deniss Slinkins
Millionaire Core