The oil market is uncertain, with oil prices constantly swinging back and forth like a pendulum clock. When ordering your heating oil, there is a good chance you will not be able to get it at the same price as the last time. In this article, you will learn about the reasons for the fluctuation of oil prices so you are ahead of the curve and end up making informed decisions.
What influences oil prices?
Similar to other commodities, the price of heating oil and other petroleum products is influenced by several factors. Here are some of the determinants of the price of oil.
The organization of petroleum exporting countries consists of 13 countries worldwide and is by far the greatest influencer of oil prices. Oil price does not escape the law of supply and demand. Increased oil production leads to a tumble in price as oil supply exceeds its demand and vice versa.
These oil-producing countries can cause significant changes in oil prices by increasing or cutting down on the amount of oil produced per day.
There have been several instances in the past where the oil price tumbled as a result of this. Notably, the decline in oil prices in 2014 was caused by reduced demand for oil by Europe and China.
- Natural disasters
Earthquakes, floods, hurricanes, and other natural disasters have, in the past, messed with oil prices, particularly when they occur in any of the OPEC countries, affecting production, transportation, or storage of oil. An unforgettable example of this is Hurricane Katrina and the flooding of the Mississippi River.
- political war and unrest
The war and instability in middle eastern countries such as Afghanistan and Iraq not only violate human rights but have a global impact as these countries hold the largest supplies of the world’s oil. Terrorism in Nigeria, a member of OPEC and one of the largest producers of oil, impacts greatly on the price of oil.
In as much as significant strides have been made towards replacing oil with more eco-friendly green energy sources, the world today still relies hugely on oil as an energy source. The increasing oil price is, therefore, of significant worry to the consumer.
How to cope with the fluctuating oil prices
Several of the factors that cause an increase in oil prices are external and out of your control as a consumer. However, here are examples of tips on how to cope with the fluctuating oil price
- Use a fast and dependable oil delivery company for your heating oil deliveries.
- Compare the cost of delivery and choose companies with affordable prices.
- Tune- up and service your oil tank at least once a year to ensure safe operation and maximum efficiency.
Interstate Gas & Oil offers a fast and dependable heating oil delivery service at an affordable price, along with oil tank tune-up and maintenance service, without causing you to break your bank account. Give us a call today or fill out our online contact form for more information!