What Impacts Fuel Prices for Consumers?
Fuel prices fluctuate every year – sometimes drastically, sometimes in minuscule moves. It’s hard to predict the market to determine how to protect against price swings. We offer price protection programs to alleviate risk, but we also want to share what impacts fuel prices. Locally we have little control over what is happening to pricing in the global heating oil market, but it is important to have information about why price swings occur.
Geopolitical – World events – political unrest, bombings, Brexit, Wall Street, national elections, etc. cause fear, uncertainty and market swings.
Supply and Demand – Whether it is real or speculation, if there is an oversupply of fuel and a lack of demand prices will go down. Whereas if there is an under supplied market and high demand, prices will increase.
False, Skewed or Unrealistic Reporting – OPEC or large oil producing countries often supply inaccurate reports of available fuel supply to drive the market up or down. Similarly company or even government reports over-state production capacity or inventory levels, creating swings in the market from traders and speculation.
Supply Disruptions – Refinery issues, wildfires or other natural disasters, can disrupt supply. Prices may increase due to decreased supply or increased transportation logistic costs.
